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Daily News Wrap-Up: APTEL Criticizes MERC for Denying Petitioner Relief

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					</table>Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) has condoned the delay in the commissioning of solar power projects by a developer and allowed the extension of the scheduled commercial operation date (SCOD).
Consequently, a tariff of ₹8.40 (~$0.10)/kWh is allowed as agreed in the power purchase agreement (PPA).
Background 
Jigajinagi Jagtap Solar Energy sought approval for a supplemental agreement dated April 21, 2017, which it entered into with Hubli Electricity Supply Company (<a href="https://hescom.karnataka.gov.in/english" target="_blank" rel="noopener">HESCOM</a>).
The respondents were HESCOM, <a href="https://energy.karnataka.gov.in/english" target="_blank" rel="noopener">Department of Energy</a>, Karnataka Renewable Energy Development (<a href="https://kredl.karnataka.gov.in/english" target="_blank" rel="noopener">KREDL</a>), and Karnataka Power Transmission Corporation (<a href="https://kptcl.karnataka.gov.in/english" target="_blank" rel="noopener">KPTCL</a>).
The petitioner wanted HESCOM to make payments for energy delivery at ₹8.40 (~$0.10)/kWh from the COD of its solar project throughout the term of the power purchase agreement (PPA).
PPAs were signed on July 13 and 14, 2015, and approved by the Commission on July 31, 2015.
On April 21, 2017, supplementary PPAs were entered into by the petitioners&#8217; special purpose vehicle (SPV) with HESCOM.
Due to delays in project commissioning beyond the SCOD, Jigajinagi Jagtap Solar Energy secured a six-month extension from HESCOMIn its petition, the developer urged HESCOM to adhere to the PPA terms and make payments at the agreed tariff of ₹8.40 (~$0.10)/kWh.
While HESCOM and KPTCL said they had no objection to the relief sought, KREDL asserted that it was not a party to the petition and sought dismissal of the petitions.
The Commission issued an order on November 22, 2018, ruling that the petitioners were entitled to a tariff of ₹4.36 (~$0.05)/kWh, applicable from the commissioning date of the project.
The solar developer was directed to fulfill payment obligations for damages and liquidated damages as per the PPA.
The petitioner approached the Appellate Tribunal for Electricity (<a href="https://aptel.gov.in/" target="_blank" rel="noopener">APTEL</a>), seeking that the case be remanded to the state commission for proper disposal.
APTEL accepted the request and remitted the case back to the state commission.
Commission’s Analysis 
The Commission acknowledged the challenges in executing the project within the SCOD in the face of delays in obtaining permissions, approval of PPA and SPPA, demonetization, delays in power evacuation approvals, and safety approvals.
Consequently, the delay in commissioning the projects should be attributed to force majeure events, a fact acknowledged by the respondents in their communications and extensions approved by the Commission.
The Commission noted that the developer was entitled to a tariff of ₹8.40 (~$0.10)/kWh since the project was commissioned within the extended time granted by the respondents.
As per the generic tariff order, the approved tariff is applicable to solar power generators entering into PPAs between April 1, 2013 and March 31, 2018.
The Commission ruled that the solar developer petitioner is entitled to the tariff as per the PPA from the date of COD.
It also directed HESCOM not to levy liquidated damages, and if already levied, the same must be refunded to the petitioner within two months.
The Commission directed HESCOM to pay the differential tariff within 90 days,  failing which the petitioner is entitled to interest at 10%.
Recently, KERC <a href="https://www.mercomindia.com/karnataka-regulator-upholds-group-wind-project" target="_blank" rel="noopener">approved</a> the group captive status of a 38 MW wind power project for Four EF Renewables.
In June, KERC <a href="https://www.mercomindia.com/karnataka-clarifications-green-energy-open-access-rules" target="_blank" rel="noopener">clarified</a> various rules in the state’s Terms and Conditions for Green Energy Open Access Regulations 2022.
Subscribe to Mercom’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’t miss any critical updates from the renewable industry.

Karnataka Regulator Condones Delay in Solar Project Commissioning

The Karnataka Electricity Regulatory Commission (<a href="https://karunadu.karnataka.gov.in/kerc/Pages/home.aspx" target="_blank" rel="noopener noreferrer">KERC</a>) has issued the retail tariff order for various distribution companies (DISCOMS) for FY 2021.  The new tariffs will come into force from November 01, 2020.
The Bangalore Electricity Supply Company (<a href="https://bescom.karnataka.gov.in/english" target="_blank" rel="noopener noreferrer">BESCOM</a>) had proposed an increase in electricity tariff of ₹1.96 (~$0.03)/kWh for all categories of consumers resulting in an average increase in retail supply tariff by 25.24%. Against this, the Commission has approved an increase of ₹0.40 ($0.005)/kWh, accounting for just a 5.17% average increase. The tariff increase allowed by the Commission is ₹0.40 (0.005)/kWh for all the DISCOMs in the state though they had requested for a higher hike in tariff.
The state regulator allowed the recovery of additional revenue partly by increasing the energy charges in the range of ₹0.20 (~$0.003) to ₹0.25 (~$0.004)/kWh for all categories.
The Commission has continued with the tariff schedule for concessional power supply to the electric vehicle charging stations by including the EV battery swapping stations, without increasing the energy charges of ₹5 (~$0.07)/kWh. It has been maintained in the orders for all the DISCOMs in the state.
The green tariff of an additional ₹0.50 (~$0.007)/kWh over the standard tariff, which was introduced a few years ago for HT industries and HT commercial consumers, to promote the purchase of renewable energy from ESCOMs has been maintained. It will be the same for all the DISCOMs.
The Commission determined a wheeling charge of ₹0.23 (~$0.003)/kWh for the HT network and ₹0.54 (~$0.007)/kWh for the low tension (LT) network. The Commission noted that the wheeling charges would apply to all open access consumers using the BESCOM network only, except for energy transmitted from renewable sources. For wheeling of energy from renewable energy sources, separate orders issued by the Commission from time to time will be applicable.
Recently, KERC <a href="https://mercomindia.com/karnataka-stakeholder-comments-invited/" target="_blank" rel="noopener noreferrer">issued</a> a discussion paper on wheeling charges and banking facilities for renewable projects. The Commission noted a need to revise the transmission and wheeling charges applicable to non-REC (renewable energy certificate) route based renewable power projects and examine the banking facility extended to them.
In May this year, KERC <a href="https://mercomindia.com/karnataka-extends-tariff-structure-solar/" target="_blank" rel="noopener noreferrer">extended</a> the validity of the existing tariff structure determined by the Commission in August 2019. The earlier regulation had expired in April 2020. The extension has been provided for one year from April 01, 2020, to March 31, 2021. The extension will facilitate the seamless development of solar projects, including rooftop solar installations in the state.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener noreferrer">Regulatory Updates </a>to ensure you don’t miss any critical updates.
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Image credit: Unsplash

DISCOMs Ask For Steep Hike in Electricity Tariff in Karnataka, Commission Goes Easy

Karnataka’s Shivamogga Smart City Limited (<a href="https://www.mygov.in/group-issue/smart-city-shivamogga/" target="_blank" rel="noopener noreferrer">SSCL</a>) has issued a Request for Proposal (RFP) for the construction of 25 MW of solar power generation projects. The SSCL will develop the solar power project on the Tunga canal through a public-private partnership and will supply the electricity to Mangalore Electricity Supply Company (MESCOM).
The solar projects will be situated on top of the Tunga canal stretches that pass through Shivamogga city. The project will be sanctioned on a design, build, finance, operate, and transfer basis.
The bid submission deadline is August 19, 2019. The technical bid opening date is August 21, 2019. The commissioning dateline for the projects has been set at 18 months.
The scope of work for this project includes the survey, investigation, planning, design, engineering, financing, procurement, supply, installation, testing, and commissioning of the projects. The contract will also include 25 years of operation and maintenance (O&amp;M) to be undertaken by the winning bidder.
An earnest money deposit of ₹18 million (~$ 261,723) must be deposited by the bidders to participate. Of this, an amount of ₹0.5 million ($ 7,270.09) can be made through online or offline transfer while ₹ 17.5 million must be deposited as a bank guarantee.
The technical criteria for bidders require that the bidder must be a corporate entity and should have established at least one solar power project with a capacity of 5 MW in the past five years. The financial criteria stipulate that the net worth of the bidders should be at least ₹950 million (~$13.77 million) in the last two financial years and the company should be profitable in the same duration.
Last year, Shivamogga Smart City had also <a href="https://mercomindia.com/karnataka-smart-cities-rooftop-solar-tender/" target="_blank" rel="noopener noreferrer">issued a tender</a> for 430 kW of grid-connected rooftop solar PV projects to be established on the city’s government buildings.
Then earlier this year, <a href="https://mercomindia.com/shivamogga-smart-city-tender-100-e-rickshaws/" target="_blank" rel="noopener noreferrer">the city also came up</a> with a tender to procure 100 electric rickshaws.
Image credit: Antalexion [CC BY-SA <a href="https://creativecommons.org/licenses/by-sa/4.0" target="_blank" rel="noopener noreferrer">4.0</a>]

Shivamogga Smart City Floats Tender for 25 MW of Solar Projects on Tunga Canal

The Karnataka Electricity Regulatory Commission (<a href="https://www.karnataka.gov.in/kerc/Pages/home.aspx" target="_blank" rel="noopener">KERC</a>) has issued an order dismissing the petition filed by Marakka Solar Power Project LL.P stating that it is not entitled to any of the reliefs under force majeure (unforeseeable) events.
The Mangalore Electricity Supply Company Limited (MESCOM) was the respondent in this case.
Marakka Solar Power Project LL.P, had entered into a PPA with MESCOM on August 29, 2015 to develop the project for a farmer who was selected for developing a 1 MW  solar  power  project  on  the farm land  at Suranahalli village, Challakere Taluk, Chitradurga  district  under  the State  Solar  Policy  2014-2021. According to the PPA, the project was to be commissioned on or before February 28, 2017 or 18 months from the date of the PPA and entitled to receive a tariff of ₹8.40 (~0.1254)/kWh.
<a href="https://mercomindia.com/140-mw-solar-commissioned-farmers-karnataka/">In 2015</a>, the Karnataka government launched a program under which 300 MW (with projects ranging from 1 to 3 MW) of solar was to be developed by farmers on land held by them at a tariff of ₹8.40 (~$0.1254)/kWh. Under this program, farmers were provided with a central subsidy of ₹50,00,000 (~$79,365)/MW.
According to <a href="https://mercomindia.com/product/india-solar-project-tracker/" target="_blank" rel="noopener">Mercom’s India Solar Project Tracker</a>, 154 projects totaling 306 MW was awarded under this program.
The petitioner argued that there was a provision in the Power Purchase Agreement (PPA) for an extension in commissioning the project if it was delayed due to factors beyond its control and therefore could be treated as a force majeure event.
The commission noted that the petitioner applied for conversion of the land after a lapse of more than 5 months from the effective date of the PPA. To this, the petitioner argued that the delay was on part of government authority in obtaining certain documents, but the petitioner failed to produce the copies of the applications proving their filling date to the concerned authorities.
The commission rejected the claim of petitioner that the delay was caused by the authorities in providing the documents. It found that the land conversion order was passed by the Deputy Commissioner within a few days after payment of the charges.
The petitioner also asked the commission to adjudicate on the project’s tariff for the term of the PPA.
According to the PPA, there is a provision to reduce the tariff due to any delay in the project’s commissioning beyond its scheduled commission date.
As the petitioners could not commission the project due to reasons outside the force majeure clause in the PPA, the commission has now ordered the project’s tariff of ₹4.36 (~$ 0.059)/kWh for the term of the PPA, as per the Generic Tariff Order dated April 12, 2018.
The commission also instructed the petitioner to pay the damages as per the PPA.
<a href="https://mercomindia.com/kerc-benchmark-solar-tariff/" target="_blank" rel="noopener">Recently,</a> Mercom reported that KERC has proposed a tariff of ₹2.79 (~$0.043)/kWh for new, MW-scale, grid-connected solar projects developed in Karnataka. The proposed utility-scale solar benchmark tariff is ₹1.57 ($0.024)/kWh or 36 percent less than KERC’s previous benchmark <a href="https://mercomindia.com/kerc-sets-new-benchmark-tariff-rs-4-36-0-064kwh-grid-connected-large-scale-solar-projects-fy2017-18/" target="_blank" rel="noopener">tariff</a> of ₹4.36 ($0.07)/kWh. The reduction comes amid a trend of declining tariffs in state tenders.

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