Regulator Rules in Favor of Solar Developer Asks BESCOM to Pay Per Agreement

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Karnataka Electricity Regulatory Commission (KERC) has ordered Bangalore Electricity Supply Company (BESCOM) to pay Umiya Holdings energy charges at the average power purchase cost (APPC) for the solar energy injected into the grid from April to May 2018.

The Commission also directed BESCOM to credit the amount of energy injected into the grid for the month to the wheeling and banking account. BESCOM must treat the said quantum of energy as unutilized banked energy and pay for the same to Umiya Holdings as per the wheeling and banking agreement (WBA).

Background

The Karnataka government had provided approval to CleanMax Harsha Solar to install 30 MW of solar power projects in the Tumkur district. Thereafter, the government allowed transferring a 1.5 MW solar power project out of the 30 MW capacity to Umiya Holdings.


Umiya Holdings sought to enter a wheeling and banking agreement for the 1.5 MW solar project along with a bank guarantee of ₹20,000 (~$256). The Chief Electrical Inspector approved the proposal. The Karnataka Power Transmission Corporation (KPTCL) granted a temporary interconnection to Umiya Holdings. Both  BESCOM and KPTCL issued the commencement certificate.

Umiya Holdings claims BESCOM and KPTCL had been unduly delaying executing the wheeling and banking agreement. KPTCL informed that it would approve regular interconnection after Umiya Holdings provided a copy of the wheeling and banking agreement. As BESCOM had not authorized the wheeling and banking agreement, Umiya Holdings requested BESCOM to execute the agreement, but BESCOM did not respond.

KPTCL informed Umiya Holdings that regular interconnection had been provided to 23.38 MW out of 30 MW. However, the provisional interconnection to the petitioner was extended instead of being regularized. BESCOM, after a lapse of one more month, approved the wheeling and banking agreement in April 2018.

When provisional interconnection was provided, Umiya Holdings had constantly injected several units of electricity that BESCOM used. However, BESCOM was using the power without making any adjustments for the said units. The number of units injected by Umiya Holdings was about 2.32 million, which amounted to ₹19.91 million (~$254,850).

Umiya Holdings argued that BESCOM was liable to compensate for the number of units injected from September 2017 to June 2018.

Commission’s Direction

The Commission observed that the petitioner is entitled to payment of energy charges at the average APPC rate for the energy injected into the grid from the date of approval of open access until the date of submission of the wheeling and banking agreement, i.e., from April 2018 to May 2018.

The Commission also directed BESCOM to credit the quantum of energy injected into the grid from May to June 2018 to the wheeling and banking account. It said that the energy was to be treated as unutilized banked energy, and payment made to Umiya Holdings as per the Agreement.

KERC recently ruled in favor of a solar developer and directed four DISCOMs to compensate the developer for the additional cost incurred due to the imposition of the goods and services tax (GST) laws under the ‘Change in Law’ clause.

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