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					</table>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) recently rejected a solar generator&#8217;s plea seeking an extension of the start date of medium-term open access (MTOA).
It said that the transmission charges towards MTOA should be billed to the buyer only after the generating station&#8217;s commercial operation date.
The Commission added that the bills corresponding to the capacity not commissioned, raised to the Haryana Power Purchase Center (HPPC) by the Central Transmission Utility (CTU), were contrary to the provision of the &#8216;Sharing Regulations.&#8217; Accordingly, it directed CTU to revise the bills and raise them on the petitioner.
Avaada Energy and Avaada RJHN had filed a petition seeking an extension of the start date of MTOA and restrain the CTU from taking any coercive measures for the non-operationalization of 114.25 MW out of the total 240 MW on the premise that the start date of MTOA was February 1, 2022.
Background
Avaada Energy was declared the successful bidder in a tender <a href="https://mercomindia.com/haryana-retender-300-mw-solar/" target="_blank" rel="noopener">floated</a> by HPPC to procure 300 MW of power from solar projects. Later, HPPC issued a letter of intent to purchase 240 MW of solar power from the proposed solar power project.
Avaada Energy applied for Stage I and Stage II connectivity, which CTU granted.
Avaada RJHN, a special purpose vehicle of Avaada Energy, entered into a power purchase agreement (PPA) with HPPC on July 6, 2020, for the supply of 240 MW of solar power.
For evacuation of the power from its project, the petitioner applied for long-term access (LTA) for 240 MW from January 5, 2022, which CTU granted. However, CTU informed Avaada Energy that the LTA would likely be operationalized only on September 25, 2022. Accordingly, Avaada Energy applied for MTOA for evacuation of power, which CTU granted for the period from February 1, 2022, to November 30, 2026.
Since the solar generator achieved the commercial operation of only 125.75 MW by the end of January 2022, it requested CTU for an extension of time for the part operationalization of MTOA for the balance of 114.25 MW up to May 23, 2022.
Avaada Energy submitted that the MTOA of the contracted capacity being 240 MW (out of which 125.75 MW capacity has already been commissioned), had been delayed due to the outbreak of COVID-19 and resultant lockdown, which were considered &#8216;force majeure&#8217; events.
Commission&#8217;s analysis
The Commission observed that Avaada Energy had requested CTU for part operationalization of MTOA upto 125.75 MW from February 1, 2022, and postponement of the balance of 114.25 MW upto May 23, 2022.
The Commission noted that as on February 1, 2022, the part capacity of the petitioner was already operational (125.75 MW) and was covered under the waiver of ISTS charges under the sharing regulations; hence no liability of transmission charges was due for such capacity. However, 114.25 MW was not commercial as on February 1, 2022, for which the petitioner was liable to pay transmission charges.
The state regulator noted that the petitioner had referred to &#8216;force majeure&#8217; events such as delay of supply from Chinese manufacturers and Covid-19 while requesting an extension of the start date of MTOA. It said that the petitioner had not placed any force majeure notice on record, nor does the MTOA agreement or the connectivity regulations have any provision for force majeure.
It said that the MTOA agreement and the connectivity regulations do not have any provision to defer the start date of LTA or MTOA.
The MTOA agreement as per Regulation 13 of the sharing regulations, provides that transmission charges should be according to CERC norms. Moreover, per the sharing regulations, the petitioner had agreed to share and pay all the applicable transmission charges of the existing transmission system from the commencement of MTOA.
The transmission charges towards MTOA should be billed to the buyer only after the commercial operation date of the generating station. CERC observed that the bills that corresponded to the capacity not commissioned and raised to HPPC by CTU were contrary to the provisions of the sharing regulations. Accordingly, CERC directed CTU to revise the bills and raise the bills on the petitioner per law.
In December 2020, the Haryana Electricity Regulatory Commission had <a href="https://mercomindia.com/haryana-regulator-open-access-solar/" target="_blank" rel="noopener">issued</a> an order extending the scheduled commissioning date for a 50 MW open access solar project in the state. It had also approved the PPA for the project meant to help HPPC meet its renewable purchase obligation (RPO) targets.
Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don&#8217;t miss any critical updates from the renewable industry.

CERC Denies Start Date Extension of Medium-Term Open Access for a Solar Project

The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> has notified the Electricity (Transmission System Planning, Development, and Recovery of Inter-State Transmission Charges) Rules 2021 to enable power utilities to access the transmission network across the country smoothly.
Power projects will no longer have to specify their target beneficiaries &#8211; a significant change from the existing system of applying for prior approval for access. The rules will also empower state power distribution and transmission companies to determine their transmission requirements and build them. States will be able to purchase electricity from short-term and medium-term contracts and optimize their power purchase costs.
Currently, generating companies apply for long-term access (LTA) based on their supply tie-ups, while medium-term and short-term transmission access is acquired within the available margins. Based on the LTA application, incremental transmission capacity is added. Several developments, such as the increasing focus on renewable energy, and the expansion of the market mechanism, necessitated a review of the existing transmission planning framework based on LTA.
The rules specify how the existing LTA would be transitioned into general network access (GNA). The rules also outline the recovery of GNA charges from the transmission network users and assign the responsibility of billing, collection, and disbursement of inter-state transmission charges to the Central Transmission Utility (CTU).
Apart from introducing GNA, the rules also specify the roles of the various agencies in the transmission planning process. The CTU will prepare a short-term plan every year for the next five years and a perspective plan every alternative year for the next ten years. It will also prepare an implementation plan for the inter-state transmission system (ISTS) every year for the next five years. The plans will be prepared on a rolling basis. The CTU will consider aspects such as right-of-way and progress of the generation and demand in various parts of the country while preparing the plan.
For the first time, the rules enable the transmission capacity to be sold, shared, or purchased by the states and generators. The regulations prescribe that excess drawal or injection over the approved GNA capacity will be charged at rates at least 25% higher. This will ensure that the entities do not under-declare their GNA capacity. The <a href="https://cercind.gov.in/" target="_blank" rel="noopener">Central Electricity Regulatory Commission</a> has been empowered to frame detailed GNA regulations in the inter-state transmission system.
The Union government has notified these rules to streamline the process of planning, development, and recovery of investment in the transmission system. The rules are aimed at encouraging investments in the generation and transmission sectors and developing deeper markets.
In August 2020, CERC <a href="https://mercomindia.com/cerc-blueprint-ists-renewable-projects/" target="_blank" rel="noopener">issued</a> a detailed procedure for granting ISTS connectivity to renewable projects. This procedure applied to CTU, regional load despatch centers, state load despatch centers, state transmission utility, distribution companies, and renewable energy implementing agencies like the Solar Energy Corporation of India.
In 2019, CERC <a href="https://mercomindia.com/cerc-details-mechanism-sharing-charges-losses-renewable-projects/" target="_blank" rel="noopener">issued</a> draft regulations for sharing inter-state transmission charges and losses. It specified that the transmission charges would be shared among the designated ISTS customers so that the yearly transmission charges are fully covered and any adjustment on account of the revision of transmission charges is recovered.

New Electricity Rules to Enable Power Utilities to Easily Access Transmission Network

The Central Electricity Regulatory Commission (<a href="http://www.cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) dismissed a solar developer&#8217;s plea to allow utilization of connectivity and long-term access (LTA) to its two wholly-owned subsidiaries and said that it was not permitted.
It said if the parent company exercises its control over more than 50% of the voting shares of the company directly or indirectly, the request for LTA and utilization of connectivity for its subsidiaries could not be approved.
The regulator said that if the petitioner found a conflict in the provisions of the power purchase agreement (PPA) with the 2009 connectivity regulations, it should request the Solar energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener">SECI</a>) to amend the PPA.
ReNew Sun Waves, a subsidiary of ReNew Power had filed a petition seeking directions from the Commission to address certain problems being faced in implementing the PPA. It had also asked for connectivity between the two wholly-owned subsidiaries to be allowed, given that the parent company owned more than 50% of the voting shares of such company or the right to appoint majority directors.
Context
In its submission, ReNew Sun Waves said that the competitive bidding guidelines allow the successful bidder to transfer 49% of its shareholding in the special purpose vehicle (SPV), executing the PPA to a third-party at any time without approval of the procurers. However, to transfer more than 49% of its shareholding in such SPV, prior approval of the procurers was required if such transfer of shareholding is at any time before the expiry of one year from the commercial operation date (CoD).
On January 10, 2019, SECI <a href="https://mercomindia.com/seci-tender-solar-ists-1200-mw/" target="_blank" rel="noopener">invited</a> proposals for setting up grid-connected solar power projects on a &#8216;Build, Own, and Operate (BOO)&#8217; basis for an aggregate capacity of 1,200 MW. The request for selection (RfS) contained the model PPA and PSA, which were prepared per the competitive bidding guidelines.
Based on a reverse bidding process, ReNew Sun Waves was <a href="https://mercomindia.com/lowest-tariff-secis-ists-solar-auction/" target="_blank" rel="noopener">declared</a> as one of the successful bidders. On March 05, 2019, SECI issued a Letter of Award (LoA) for the supply of 300 MW power, in favor of one of ReNew Sun Waves&#8217; wholly-owned subsidiaries. Subsequently, on August 13, 2019, ReNew Sun Waves and SECI executed a PPA for the supply of 300 MW power for 25 years.
In an earlier order, the Commission had said that RfS issued by SECI allowed for the creation of SPVs for project implementation. Several companies were executing projects through the creation of subsidiaries after winning the bids.
The solar developer said that the connectivity regulations, 2009 provided that a person should not transfer its connectivity or LTA either in full or in part to any other person. However, the regulation was silent on whether such connectivity and LTA granted to the parent company could also be utilized between its two wholly-owned subsidiary companies.
Commission&#8217;s Analysis   
The regulator said there was no provision regarding the transfer of connectivity or LTA in the connectivity regulations 2009.
After going through all the facts, the Commission said that the petitioner should have noted the applicable regulations governing connectivity and LTA while participating in the bidding process. Not having done so, after being declared a successful bidder, it cannot seek that certain provisions of regulations should be favorably amended to benefit the developer.
&#8220;While the competitive bidding guidelines that the central government has notified under Section 63 of the Act deal with the transparent process for bidding, the 2009 connectivity regulations have been notified by the Commission deal with issues related to connectivity and LTA,&#8221; it said.
In August last year, CERC <a href="https://mercomindia.com/cerc-blueprint-ists-renewable-projects/" target="_blank" rel="noopener">issued</a> a detailed procedure for granting connectivity to renewable projects to the interstate transmission system. This procedure will apply to central transmission utility, regional load despatch centers, state load despatch centers, state transmission utility, concerned distribution companies, and renewable energy implementing agencies like SECI.
Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.

CERC Rejects Solar Developer’s Plea to Transfer Connectivity & LTA to its Subsidiaries

The Central Electricity Regulatory Commission (<a href="http://cercind.gov.in/" target="_blank" rel="noopener noreferrer">CERC</a>) has quashed a transmission service agreement (TSA) termination notice that was issued by the Power Grid Corporation of India Limited (<a href="http://www.powergridindia.com/" target="_blank" rel="noopener noreferrer">PGCIL</a>) to SEI Sunshine Power Private Limited. The CERC has also quashed two letters issued by PGCIL to SEI regarding long-term access (LTA) to its transmission system.
SEI Sunshine Power Private Limited is a subsidiary of Greenko Group.
The CERC was hearing a petition filed by SEI Sunshine Power Private Limited seeking direction to quash the letters and TSA termination notice dated October 3, 2018, issued by PGCIL.
SEI Sunshine Power Private Limited is setting up six solar PV projects of 30 MW, aggregating 180 MW in the state of Madhya Pradesh. PGCIL granted the agreement to the solar project developer after following the due process. The LTA was to be operationalized either from September 30, 2016 or from the date of availability of the specified transmission system, whichever was later.
After the LTA, the developer and PGCIL executed Long Term Access Agreement (LTAA) and TSA dated August 26, 2016.
On March 28, 2018, PGCIL informed the solar project developer about the operationalization of LTA and to deposit letter of credit (LC) amounting to ₹77.5 million (~$1.12 million) towards payment security mechanism. The solar project developer requested PGCIL to operationalize the LTA in line with the completion of the specified transmission system. SEI Sunshine Power Private Limited also informed PGCIL that solar PV projects are exempted from making any payment towards transmission charges and losses and therefore, there is no requirement for opening any letter of credit towards the payment security mechanism.
The PGCIL issued another letter on March 29, 2018, requesting the letter of credit to be opened for payment security mechanism.
While going through the submissions made by both the parties, the commission stated that the decision of PGCIL to operationalize the LTA without commissioning the entire transmission system is not in line with the LTA agreement. PGCIL’s decision to invoke the second provision to clause (5) of Regulation 8 of the Sharing Regulation is not applicable.
The second provision addresses the situation where the operationalization of the LTA is contingent upon commissioning of several transmission lines, and only some of the transmission lines have been declared commercially operational. In such a case, the obligations of the generator to pay the transmission charges is to the extent of LTA operationalized corresponding to the transmission system commissioned. Stating this, CERC set aside letter dated March 28, 2018.
The CERC also observed that in the event the entire transmission system gets commissioned, and still, the developer fails to declare the commercial operation of its generating station, it will be liable to pay the transmission charges and will also be liable to open the letter of credit towards the payment security mechanism until the commissioning of its generating station. With this, CERC set aside another letter dated March 29, 2018.
The commission also stated that the solar project developer is not obliged to open the letter of credit and therefore the TSA termination notice October 3, 2018, will also be set aside.
This decision sets positive precedence for developers in the future facing similar situations.
<a href="https://mercomindia.com/cerc-generic-tariff-renewable-2019-20/" target="_blank" rel="noopener noreferrer">Recently</a>, the CERC set generic tariffs for the purchase of electricity from a host of renewable energy generation sources during the financial year (FY) 2019-20.

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