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

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					</table>The Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) approved ₹70.6 million (~$849,791) compensation to Solitaire Powertech over the reported generation loss of 15,949 MWh for its 30 MW solar project, following the final estimations submitted by the Grid Controller of India (<a href="https://posoco.in/en/" target="_blank" rel="noopener">GCIL</a>).
Solitaire Powertech filed a petition seeking compensation for a generation loss of 28,242 MWh for their 30 MW solar project from August 2020 to September 2021.
The respondents in the case were Karnataka Power Transmission Corporation (<a href="https://kptcl.karnataka.gov.in/english" target="_blank" rel="noopener">KPTCL</a>) and Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener">SECI</a>).
Background
Solitaire Powertech first filed the petition for compensation with KERC in 2021. The Commission, in an order dated September 14, 2021, outlined that the petitioner is entitled to ₹4.43 (~$0.053)/kWh compensation for generation loss due to transmission congestion starting August 1, 2020. Monthly compensation calculations were to be submitted to the Commission and KPTCL within eight weeks.
The Commission said it would verify and determine a lump sum compensation payable by KPTCL within eight weeks, with a 6% per annum interest on default.
Following this order, KPTCL challenged it through a writ petition, and the petitioner contested the decision before the Appellate Tribunal for Electricity (<a href="https://aptel.gov.in/" target="_blank" rel="noopener">APTEL</a>), disputing the disallowed claim from the commercial operation date of April 7, 2018.
After the petition’s dismissal, KPTCL filed an appeal against the final order&#8217;s legality and was directed to approach its state commission and seek a third-party assessment.
After reviewing submissions, the Commission decided to refer the assessment of generation loss to an independent expert and chose the Grid Controller of India (<a href="https://www.posoco.in/" target="_blank" rel="noopener">GCIL</a>).
The Executive Director of Southern Regional Load Despatch Centre (SRLDC) at GCIL submitted a detailed curtailment report on June 15, 2023, quantifying a net generation loss of 15,949 MWh for the relevant period of the petitioner&#8217;s 30 MW solar project due to power evacuation curtailment.
Following the report submission, both the petitioner and KPTCL filed objections.
The petitioner challenged Grid India&#8217;s Curtailment Report, asserting errors in quantifying generation losses due to technology and location differences. It also argued against the comparison with Azure&#8217;s project, emphasizing the necessity of shutting down extra inverters for grid security.
The petitioner argued that the amount of energy produced by the petitioner&#8217;s project&#8217;s generating units has significantly decreased in the Curtailment Report, indicating an error of around 30%.
The report from Grid India explicitly stated that the petitioner had suffered a generation loss of at least 15,949 MWh, contrasting with the 28,242 MWh loss calculated in the TUV Rheinland Report.
The petitioner urged the rejection of Grid India&#8217;s Curtailment Report and acceptance of the 28,242 MWh generation loss computed in the TUV Rheinland Report.
KPTCL argued that no liability for damages exists due to the absence of a valid agreement pre-determining damages. Without a binding agreement on damages, KPTCL claimed that it could not be held responsible for hypothetically quantified losses.
It also added that the petition did not allege loss/damages based on tortious liability, so no relief could be granted on that ground. Therefore, it requested the dismissal of GCIL&#8217;s estimated loss and rejection of the petitioner&#8217;s claim for the above reasons.
Commission Analysis 
The Commission analyzed the opposing arguments for the energy loss from August 2020 to September 2021.
It noted that the petitioner submitted an Energy Yield Estimation Analysis Report by TUV Rheinland, estimating a loss of 28,242 MWh. However, it raised concerns regarding the reliability of the TUV Rheinland software.
The Commission found the evidence insufficient to support the claimed energy loss.
In case the loss of generation at 15,949 MWh, as assessed by GRID India, is accepted or adjusted, the Commission said GRID India&#8217;s report estimated a generation loss of 15,949 MWh.
The Commission considered the methodology used and the objections raised by both parties. After assessing dissimilarities between projects and expert opinion from GCIL, the Commission affirmed the 15,949 MWh generation loss as calculated by GRID India.
The Commission rejected the petitioner&#8217;s request to true up the generation loss, considering the reasonableness of the estimate provided by GCIL.
Given the validated generation loss of 15,949 MWh, at a rate of ₹4.43(~$0.053)/kWh, the total compensation/damages payable to the petitioner is ₹70.6 million (~$849,791), i.e., 15,949 x 1,000 x 4.43(~$0.053) = ₹70,654,070 (~$849,791).
Recently, KERC <a href="https://www.mercomindia.com/karnataka-regulator-condones-project-commissioning" target="_blank" rel="noopener">condoned</a> the delay in the commissioning of solar power projects by a developer and allowed the extension of the scheduled commercial operation date.
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.

KERC Greenlights ₹70.6 Million Compensation for Generation Loss to Developer

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					</table>The Rajasthan Electricity Regulatory Commission (<a href="https://rerc.rajasthan.gov.in/" target="_blank" rel="noopener">RERC</a>) has allowed the annual change in tariff for biomass projects in the state based on the increase or decrease in variable charges like fuel costs.
Under the proposed &#8220;Rajasthan Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) (Second Amendment) Regulations, 2023,&#8221; the tariff for biomass projects determined in the financial year (FY) 2023-24 will apply for the FY 2024-25 and FY 2025-26.
The stakeholders referred to the prevailing increase of 5% in tariffs and sought for it to be upheld by the Commission.
The Commission, after considering the suggestions, added the clause to the existing regulation that an annual increase or decrease in variable charges, as the case may be, in Rs /kWh over the variable charges of the previous year, keeping FY 2023-24 as the base year for the respective technology, will apply.
It also ruled that for projects whose power purchase agreements (PPA) have expired, a tariff equivalent to 85% of last year&#8217;s PPA duration tariff would apply with similar annual adjustments in variable charges.
The Commission also made a few observations in respect of stakeholders&#8217; concerns about the recently formulated regulations. The final comments will now be formulated into a regulation and notified by it.
The draft regulations, accompanied by the explanatory memorandum and public notices, were made available on the Commission&#8217;s website for public feedback until October 16, 2023.
Seventeen stakeholders provided their feedback on the draft regulations and explanatory memorandum, which the Commission considered in finalizing the Regulations.
Concerns Addressed and Regulations Amended 
Scope of Regulations
The stakeholders raised questions on the applicability of terms and conditions other than tariffs related to renewable captive power plants (both co-located and supplying power under open access), Renewable Energy plants supplying power to a third party under Open Access, and Renewable Energy plants installed behind the meter.
The Commission clarified that the regulations would apply for the entire scope across the state as specified and during the entire tariff determination period from April 1, 2020, to March 31, 2026.
It said the proposed provision, affirming the extension of the regulations until March 31, 2026, would prevail.
Control Period
The stakeholders had raised concerns about the control period of the tariff regulations. They explained that in the case of a wind power project, the gestation period is around 12 to 18 months, and the sunset period on the regulations, as per the draft, will be March 31, 2026. They insisted on extending the control period till March 31, 2027.
After considering the suggestions, the Commission dropped the proposed provision of the applicability of tariff on projects to be commissioned up to March 31, 2024, and kept the control period the same for six financial years, from April 1, 2020, to March 31, 2026.
Tariff for Biomass Projects
Concerns were also raised about the applicability of the tariff regulation to biomass projects. They suggested that the projects for which PPAs had already been approved and were set to be commissioned be exempted from the regulation. They also recommended that the Commission take note of different factors involved in the biomass projects, where the fuel price can be inconsistent over a period of time, and that a price escalation must be allowed every two years.
Stakeholders sought an annual escalation of 7% to 10% in fuel costs as the biomass sector across the country is facing significant inflation.
The Commission amended the regulation to exempt the projects already commissioned or for which PPAs have been approved before the date of notification of the new regulations.
The regulator also broadened the scope of generic tariff from projects commissioned up to March 31, 2024, to projects that are already commissioned or for which the Commission has approved the PPAs before the date of notification of these regulations.
To accommodate the request for fuel price escalations, the Commission noted that the fuel price will stay consistent for biomass projects that are already commissioned or for which the PPAs have been approved before the date of notification of these regulations and also for the plants commissioned during the control periods FY 2009-15 and FY 2015-20.
The fuel prices will be per the bidding documents for projects yet to be commissioned.
Use of Fossil Fuel or Solar Power in Biomass Projects
The stakeholders proposed that all biomass projects commissioned up to March 31, 2024, must be allowed the standard 15% usage of coal or solar power for operations so all the projects operate at a level playing field. They also requested that the provision be extended to allow solar power to be procured from projects commissioned on or before March 31, 2026, the effective period of the regulations.
The Commission said it had decided to allow the use of 15% fossil fuel or solar power to the existing biomass power projects only, i.e., projects that had already achieved commissioning before the current regulations came into effect.
It, however, allowed for the solar power supplied to the biomass plants to be procured from projects commissioned up to March 31, 2026, extending it from the previous March 31, 2024, timeline.
Banking Period
The proposed regulations for banking were set to apply till March 31, 2023, to all existing projects as well as projects commissioned up to March 31, 2026.
Stakeholders argued that in a case where the project is commissioned in FY 2024-25, the developer would receive the banking facility only for five years. Failure to provide such facilities for the entire life of the project will inevitability result in operational and financial challenges, particularly in a captive project, they stated.
They also noted that the state DISCOMs were allowed to deduct 10% of the banked energy towards banking charges, and the Commission has now proposed not allowing these banking charges after March 31, 2030, which could be detrimental to DISCOMs.
The Commission clarified that the proposed regulation was intended to provide regulatory certainty, and the banking facility, including charges, would be applicable until March 31, 2030. After that date, the banking provisions would be governed by the regulations in force at that time.
Additional comments were not part of the original proposal and were noted for future consideration in amendments.
In September, RERC <a href="https://www.mercomindia.com/rajasthan-five-year-extension-expired-ppas-wind-projects" target="_blank" rel="noopener">approved</a> Rajasthan Urja Vikas Nigam (RUVNL) to extend the power purchase agreements (PPAs) with 12 wind power generators for five years.
Recently, RERC <a href="https://www.mercomindia.com/rajasthan-tariff-kusum-component-c" target="_blank" rel="noopener">approved</a> a ceiling tariff of ₹3.55 (~$0.043)/ kWh for solar power projects to be set up under Component C of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan program for feeder-level solarization.
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.

Rajasthan to Allow Annual Revision in Biomass Tariffs

Mrs. Aishwarya Rai Bachchan along with Relishah Export (RM) and Classic marble Company Private Limited (CMCPL), have jointly filed a case with the Maharashtra Electricity Regulatory Commission (<a href="https://www.merc.gov.in/" target="_blank" rel="noopener noreferrer">MERC</a>) against the <a href="http://www.mahadiscom.in/" target="_blank" rel="noopener noreferrer">Maharashtra State Electricity Distribution Company Limited</a> (MSEDCL) for the delay in payments towards the power generated from wind energy projects.
Similarly, Vostok (Fareast) Securities Private Limited (VFSPL), Silverline Investment Company Private Limited (SICPL), and Bengal Cardboard Industries &amp; Printers Private Limited (BCIPPL), have also filed petitions against MSEDCL for the same reason.
All six petitioners are wind power generators.
The commission has directed MSEDCL, the respondent, in this case, to reconcile the statement of accounts with the petitioners within two weeks and intimate the date by which the payment would be made.
The MSEDCL owes a total sum of ₹30.24 million (~$0.423 million) to the six wind generators.
The commission noted that MSEDCL made the payments of the outstanding principal amount and delayed payment charges as claimed by the petitioners in their original petitions. It also stated that MSEDCL has started paying some amount including late payment charges which were due to be paid to the wind generators after the original petition, but, there is still some amount pending for payment.
The Commission has now ordered the MSEDCL to note that if the payment is further delayed, penal interest of 1.25% per month on the late payment charges will have to be paid.
In May 2019, Mercom had <a href="https://mercomindia.com/merc-warns-msedcl-wind/" target="_blank" rel="noopener noreferrer">reported</a> that MERC reprimanded MSEDCL for the continued delay in meeting payment obligations to independent power producers, including delayed payment charge, and for disregarding the previous orders of the commission.
The state has been struggling to meet its solar and non-solar renewable purchase obligations (RPOs) and has been issuing tenders to procure <a href="https://mercomindia.com/maharashtra-tender-solar-projects/" target="_blank" rel="noopener noreferrer">solar</a> and <a href="https://mercomindia.com/maharashtra-wind-energy-tariff-cap/" target="_blank" rel="noopener noreferrer">wind</a> energy to meet the obligations. The tariff caps and the questionable creditworthiness of the DISCOM have earlier seen a <a href="https://mercomindia.com/maharashtra-ag-feeder-solar-retender/" target="_blank" rel="noopener noreferrer">tepid</a> response for the tenders issued.
Tag: Maharashtra Electricity Regulatory Commission, MSEDCL, wind generators, petitions, respondent, delay payment, MERC, delayed payment charges

Maharashtra Commission Asks DISCOM to Settle Dues of Wind Power Generators

In a recent judgment, the <a href="https://www.karnataka.gov.in/kerc/Pages/home.aspx" target="_blank" rel="noopener noreferrer">Karnataka Electricity Regulatory Commission</a> (KERC) ordered <a href="http://www.hescom.co.in/home.html" target="_blank" rel="noopener noreferrer">Hubli Electricity Supply Company Limited</a> (HESCOM) to pay the dues to VRL Logistics Limited and Maris Power Supply Company Limited (MPSCPL) within a month.
<a href="http://www.vrlgroup.in/" target="_blank" rel="noopener noreferrer">VRL Logistics Limited</a> (VRL) and <a href="http://www.marispower.co.in/" target="_blank" rel="noopener noreferrer">Maris Power Supply Company Limited</a> had filed separate petitions with the commission against Hubli Electricity Supply Company Limited’s delay in payment.
The petitions were against the delay in the payment of interest and tariff invoices to the tune of ₹6,892,159 (~$100,031) and ₹4,198,095 (~$60,930), respectively.
VRL Logistics Limited had asked the respondent (HESCOM) to pay a sum of ₹6,892,159 (~$100,031) towards the interest accrued on delayed payments against tariff invoices from January 2016 to December 2016 and ₹500,000 (~$7,256) as the compensation for breach of contract.
In the petition dated July 30, 2019, Maris Power Supply Company Private Limited had asked the respondent for the payment of interest to the tune of ₹4,198,095 (~$60,930) for the delayed payment against tariff invoices by the respondent between March 2016 and March 2018.
Maris Power, a Chennai-based company, has alleged that HESCOM has not made the payments for the energy supplied from its 8 MW wind project within the time prescribed in the power purchase agreement (PPA) signed on March 29, 2014, and another secondary power purchase agreement (SPPA) dated March 18, 2015.
Meanwhile, the respondent, in its statement of objections, has admitted that there was a “delay in payment of invoices due to a shortage of funds, but it was not intentional.” The respondent has also submitted that the interest as per the terms of the PPA “will be paid subject to reconciliation of accounts.”
After the petition was filed on July 23, 2019, HESCOM also filed a memo along with a statement showing the computation of interest payable as per the terms of the PPA, from March 2016 to March 2018 amounting to an amount of ₹4,198,095 (~$60,930).
The petitioner also agreed to the computation of interest, as stated by the respondent in its memo.
The commission’s order states that the respondent will pay ₹4,198,095 (~$60,930) towards the interest for the delayed payment against tariff invoices during the period from March 2016 to March 2018 within a period of one month.
Similarly, VRL Logistics Limited, a Karnataka-based company, which had filed a petition against HESCOM for the delay in payment of ₹6,892,159 (~$100,031). The company has 34 wind turbine generators with a generation capacity of 42.5 MW at Kappatgudda in Gadag, Karnataka. The company had signed six PPAs with HESCOM.
In the petition, VRL stated that it had regularly raised monthly invoices for the delivered energy and during the period from January 2016 to December 2016, “the respondent defaulted by not making the payment of the invoices within the 15 days’ period specified in Article 6.2 of the PPA”.
In a letter dated August 21, 2017, the petitioner had claimed ₹6,892,159 (~$100,031) towards the interest on delayed payments from January 2016 to December 2016. As no action was taken by HESCOM, this petition was filed later to resolve the issue.
In its statement of objections, HESCOM argued that the payment of some of the invoices was delayed due to the shortage of funds, adding that the delay was beyond its control and inadvertent.
Based on the memo submitted by the petitioner where it states that the respondent has admitted its liability to pay a sum of ₹6,454,914 (~$93,684.8) towards the interest for the delayed payment of tariff invoices during the said period, the state commission has said that HESCOM should pay the amount within a period of one month.
Earlier, <a href="https://mercomindia.com/payment-delays-hit-solar-and-wind-developers/" target="_blank" rel="noopener noreferrer">Mercom</a> reported on how delays in payments have become a recurring problem for solar and wind project developers in the country.
A few months ago, the KERC had <a href="https://mercomindia.com/kerc-dismisses-petition-delayed-payment-biomass/" target="_blank" rel="noopener noreferrer">dismissed</a> a petition filed by Koppal Green Power Limited against Gulbarga Electricity Supply Company Limited (GESCOM) asking it to pay an interest of ₹4.2 million (~$60,678) towards the delayed payment of differential tariff for the power supplied through a 6 MW biomass project.

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