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

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					</table>The Punjab State Electricity Regulatory Commission (<a href="https://pserc.gov.in/" target="_blank" rel="noopener">PSERC</a>) recently quashed the order of the Punjab State Power Corporation (<a href="https://pspcl.in/" target="_blank" rel="noopener">PSPCL</a>) terminating the power purchase agreements (PPAs) for procuring power from two solar projects of 15 MW each in the state.
The Commission took notice of PSPCL&#8217;s &#8216;arbitrary and unilateral&#8217; action in disconnecting the petitioners&#8217; projects despite being aware of the grant of stay in the matter.
Bhanuenergy Infrastructure Power and Bhanuenergy Industrial Development had filed a petition seeking a declaration of the termination of the PPAs by PSPCL as invalid.
Background 
The petitioners are solar power generators supplying power to PSPCL from their two projects of 15 MW capacity each. The PPAs were signed with PSPCL on January 1, 2014.
PSPCL issued letters to the solar developers alleging default with regards to the capacity installed with directions to remove the excess capacity installed.
The developers replied by submitting data to PSPCL, demonstrating that the installed capacity at both projects was within the limit prescribed under the request for proposal.
On September 15, 2021, PSPCL intimated that it had terminated the PPAs with immediate effect.
The developers said that all disputes between the parties had to be resolved through discussion and amicable resolution. But PSPCL did not even respond to the petitioners&#8217; letters and sought to terminate the PPAs arbitrarily.
PSPCL, in its submission, stated that the failure on the part of the developers to install the projects as per the permissible DC capacity was to be considered an event of default.
So, when an event of default occurred, PSPCL was within its right to terminate the PPAs in case the event of default continued for a period beyond 60 days.
PSPCL submitted that the only supporting data furnished by the developers had been a table of the number of modules stated to have been installed at the project sites and their corresponding DC capacity. The petitioners had failed to explain what prevented them from furnishing the same at the inspection time.
Commission&#8217;s analysis
The Commission observed that PSPCL could not disclose the actual number of modules and the rated capacities found during the inspection. It noted that the inspection reports do not represent an accurate assessment of the installed DC capacity of the projects
The Commission also observed that the inspection reports, as per PSPCL&#8217;s admissions in its later affidavit, had been faulty.
PSERC stated that the procedure to deal with the &#8216;Event of Default&#8217; by either party was contained in Article 13 of the PPA. However, it allowed termination of the PPA only if the generating company could not address the default within 60 days of receipt of notice from the PSPCL. Once the developers furnished the details of the project&#8217;s DC capacity within 60 days and invited PSPCL for inspection, PSPCL could not proceed with the termination of the PPAs under law.
PSPCL issuing the default notices and then terminating the PPAs was based on a vague inspection report, whose details kept changing with each affidavit filed by PSPCL.
The state regulator added that without even a token effort to verify the authenticity of its inspection reports which lacked any detail, PSPCL took the step of issuing a default notice.
The Commission, therefore, quashed both the default and termination notices issued by PSPCL.
Last November, the Punjab government <a href="https://mercomindia.com/punjab-renewable-energy-tariffs-renegotiation-bill/" target="_blank" rel="noopener">passed</a> a bill to revise the long-term PPAs between PSPCL and renewable energy generators. The bill sought to reduce the tariffs for renewable energy projects approved by the state electricity regulatory commission.
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.

Punjab Commission Quashes DISCOM’s Decision to Terminate PPAs of Two Solar Projects

The Uttar Pradesh Power Corporation Limited (<a href="https://www.upenergy.in/" target="_blank" rel="noopener noreferrer">UPPCL</a>) has filed a petition with the Uttar Pradesh Electricity Regulatory Commission (<a href="http://www.uperc.org/" target="_blank" rel="noopener noreferrer">UPERC</a>) seeking it to invalidate the cancellation of a power sale agreement (PSA) for 300 MW of wind power.
The UPPCL had signed a PSA with NTPC Limited for a 350 MW of wind power project on March 14, 2019. Of this, 300 MW was by Mytrah Vayu (Amravati) Private Limited, a wind power developer, with whom NTPC signed a power purchase agreement on March 25, 2019. The remainder 50 MW was from Srijan Energy Limited, a subsidiary of Continuum Wind Energy.
The state distribution company (DISCOM) stated that NTPC <a href="https://mercomindia.com/uppcl-reprimanded-delay-getting-approvals-wind-projects/" target="_blank" rel="noopener noreferrer">terminated</a> its PSA through a letter dated July 18, 2019, stating that the UPPCL could not obtain the state Commission’s approval for the PSA adopting the tariff, trading margin of ₹0.07 (~$0.00094)/kWh, and for the procurement of the contracted capacity. NTPC noted that Mytrah Vayu also terminated its PPA with it on June 24, 2019.
UPPCL contended that it was NTPC’s responsibility to file a petition with the Central Electricity Regulatory Commission (CERC) for tariff adoption and other approvals since it was a multi-state power supplier like the Solar Energy Corporation of India (SECI) and PTC India Limited. It further stated that the NTPC did not provide the necessary documents for the approval of the contracted amount of power to be procured.
A representative for NTPC Limited said that the company would present its case through legal counsel and sought one month to file its reply to the petition. There were no representatives for Mytrah Vayu.
The Commission noted that the matter of approval of wind power for 350 MW had come up in an earlier petition by the UPPCL. Here, a representative of the NTPC said that the company would file a petition with the CERC for the adoption of tariff and provide necessary documents to the UPPCL for the approval of the contracted power. It noted that the NTPC did not provide these documents and went ahead with terminating the PSA for 300 MW of wind power, dated March 25, 2019. It also noted that the UPPC had withdrawn the petition.
Upon analysis, the UPERC issued a stay order on the PSA for 300 MW and all related activities related to it until the petition was disposed of.
It directed the UPPCL to serve the copies of the petitions to NTPC and Mytrah Vayu if it has not done so already and gave the respondents a month to file their responses. Following this, UPPCL is to file its rejoinder two weeks from the date the respondents file their replies. It said that the next hearing for the petition would be held on August 4, 2020.
Previously, the CERC approved tariffs ranging between ₹2.79 (~$0.038)/kWh and ₹2.83 (~$0.039)/kWh for 480 MW of wind power projects (Tranche -VII). The tender was <a href="https://mercomindia.com/seci-tender-wind-solar-rooftop/" target="_blank" rel="noopener noreferrer">issued</a> by the Solar Energy Corporation of India Limited. Of this, 380 MW was <a href="https://mercomindia.com/seci-set-sell-480-mw-wind-power-kerala-uttar-pradesh/" target="_blank" rel="noopener noreferrer">allocated</a> to UPPCL.

Uttar Pradesh Power Corporation Seeks to Invalidate PSA Termination for 300 MW Wind Power

The National Institute of Transforming India (<a href="http://niti.gov.in/">NITI</a>) Aayog has issued a draft concession agreement for public private partnership (PPP) for operation and maintenance of electric buses in Indian cities. The NITI Aayog has undertaken an initiative to provide a model concession agreement (MCA) for introducing electric-bus fleet in cities for public transportation on PPP mode on operational expenditure (per km basis) model.
The draft is open for comments and suggestions up to October 4, 2018. A stakeholder’s meet will be organized at NITI Aayog, New Delhi on October 12, 2018, to discuss the same.
NITI Aayog’s model is based on international best practices. The draft has been issued with the view of providing cleaner, more efficient and affordable public transportation. The objective is to provide operation and maintenance (O&amp;M) efficiency of the city bus fleet for the authority, while ensuring bankability of the project for the private sector.
The concessionaire (license or permit holder) will be required to incur the necessary capex for procurement of the e-buses and O&amp;M infrastructure, while the authority will incur operational expenditure on per kilometer basis.
KEY HIGHLIGHTS
<ul>
<li>The operator will be solely and exclusively responsible for all drivers, employees, workmen, personnel and staff employed for the purposes of implementing the project.</li>
<li>Operator alone will be the principal employer in terms of the provisions of the Factories Act, 1948 and the Contract Labor (Regulation and Abolition) Act, 1970.</li>
<li>Operator will bear the risk of loss in relation to each bus for the performance of its operation and maintenance obligations.</li>
<li>Operator will provide for charging infrastructure at the maintenance depots for a specified minimum number of buses and provide adequate infrastructure for the metering of consumption of electricity at each of the individual charging stations.</li>
<li>The authority will pay the lump sum amount due and payable for each of the funded works to the operator in four installments. Upon the operator completing about 30 percent, 60 percent, 80 percent and 100 percent of the respective funded works.</li>
<li>If the contract is terminated before the completion of funded works, the authority will pay to the operator 75 percent of the fair value of the funded works undertaken until the transfer date, if such termination occurs on account of an operator default or a non-political event.</li>
<li>110 percent of the fair value of funded work will be provided if termination occurs on account of an authority default, a political event or an indirect political event.</li>
</ul>
Per the draft, the operator will be solely responsible for the procurement of electric buses. During the contract period, ownership of buses will remain with the operator and the operator will be responsible for all electric buses to be registered in the name of the operator.
<a href="https://mercomindia.com/govt-approves-55-billion-fame-program/" target="_blank" rel="noopener noreferrer">Recently</a>, the central government approved a subsidy corpus of ₹55 billion (~$0.78 billion) to be disbursed under the second phase of Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (<a href="https://www.fame-india.gov.in/">FAME</a>) program. Incentives will be provided on the purchase of two-wheelers as well as three-wheelers and four-wheelers, including taxis and electric buses used in public transport to check pollution.
The model concession agreement can help change the way public transportation is conducted in India if properly coupled with FAME II.
Image Credit: DKMcLaren [CC BY-SA <a href="https://upload.wikimedia.org/wikipedia/commons/f/ff/Bengbu_Bus_ANKAI_Electric_Buses.jpg" target="_blank" rel="noopener noreferrer">4.0</a>]

NITI Aayog Suggests Electric-Bus Fleet in Cities Under Public Private Partnership Mode

The Office of Directorate General of Anti-Dumping (DGAD) has officially <a href="http://www.dgtr.gov.in/sites/default/files/Termination-order-Solar-23-3-18_0.pdf" target="_blank" rel="noopener">terminated</a> the investigation process for the anti-dumping petition filed by Indian Solar Manufacturers Association (ISMA) in June 2017 and later withdrawn in March 2018.
DGAD’s office terminated the investigation after the ISMA <a href="https://mercomindia.com/anti-dumping-petition-withdrawn/" target="_blank" rel="noopener">withdrew</a> the original petition in order to extend the years of investigation to include the period from April 2016 to December 2017 (21 months). The reason cited for the extension was that the dumping has been drastic after the earlier investigation period of June 30, 2017.
When contacted, one of the petitioners told Mercom, “We will refile the new petition in the second week of April and the DGAD’s office will initiate a new investigation for that petition. The current order of termination is for the petition that has been withdrawn by ISMA.”
This was the second anti-dumping petition against solar imports from China, Taiwan, and Malaysia, filed by the ISMA since 2014. In its termination letter, the DGAD’s office did not seem pleased with the move and stated, “If petitions start getting withdrawn on account of change in injury to petitioners during the course of investigation, then it will lead to chaos.”
Mercom recently <a href="https://mercomindia.com/indian-solar-import-export-2017/" target="_blank" rel="noopener">reported</a> that in calendar year (CY) 2017, the Indian solar sector imported solar modules and cells totaling nearly $4.12 billion (~₹269 billion), a 43 percent increase from the $2.88 billion (~₹194 billion) recorded during the preceding year.
Meanwhile, in a <a href="https://mercomindia.com/dgad-70-percent-safeguard-imported-solar-cells/" target="_blank" rel="noopener">preliminary finding</a> issued in January, the Directorate General of Safeguards Customs and Central Excise had recommended that a 70 percent safeguard duty be imposed on solar cells imported from China and Malaysia for a period of 200 days.
The recommendation came after the Indian Solar Manufacturers Association (ISMA) filed a <a href="https://mercomindia.com/isma-petition-safeguard-duty-solar-cells/" target="_blank" rel="noopener">petition</a> with the Directorate General of Safeguards Customs and Central Excise in December 2017, that sought the imposition of a safeguard duty on imported solar cells from China, Malaysia, Singapore, and Taiwan.
On January 22, 2018, the Madras High Court put a temporary <a href="https://mercomindia.com/safeguard-duty-case-update/" target="_blank" rel="noopener">stay</a> on the recommendation to levy a 70 percent safeguard duty on solar components imported to India.

termination

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