Telangana Regulator Asks DISCOM to Pay Up for Using Banked Energy from a 2 MW Solar Project

The Telangana Electricity Regulatory Commission (TSERC) directed the Transmission Corporation of Telangana Limited (TSTRANSCO) and the Telangana State Southern Power Distribution Company Limited (TSSPDCL) to provide long-term intrastate open access (LTOA) to Ener Sol Infra Private Limited immediately. The Commission added that they should take immediate steps to make payments to the developer for the energy drawn from its 2 MW solar project.

Background

Ener Sol Infra had filed a petition requesting the Commission to direct both the DISCOM and the nodal agency to approve the tripartite agreement (open access) for its 2 MW solar project for third-party sale.

Ener Sol Infra had set up the project in the Nalgonda district of Telangana. The company had entered into a power purchase agreement (PPA) with NATCO Pharma Limited (a third-party consumer) for the sale of power for 25 years.


As per the technical approval accorded for the generation of energy, it applied to TSSPDCL for synchronization to the grid after completing the project. The project achieved the commercial operation date (COD) on May 18, 2018, which was certified by the DISCOM after conducting the necessary inspection.

In its submission, Ener Sol Infra said that both TSTRANSCO and TSSPDCL had not approved the LTOA, which had put the company in deep financial trouble even after repeated requests.

The DISCOM argued that it carried out the feasibility study only to accord approval for grid connectivity. The DISCOM noted that the processing criteria for open access were to be initiated by TSTRANSCO. So, the permission accorded for grid-connectivity does not amount to approval for availing open access facility.

The state DISCOM further noted that the LTOA transaction could not be processed due to the grid network’s overloading conditions.

The distribution company also said that it was not liable to pay for the energy injected from the date of synchronization to the open access agreement date at any mutually agreed price without any rate being fixed by the Commission.

On the other hand, TSTRANSCO noted that the feasibility report of the DISCOM was essential for processing the open access application, and it can process it only after the receipt of the technical feasibility report.

Commission’s Analysis

The Commission noted that both the DISCOM and the nodal agency didn’t let the petitioner undertake the third-party sale of energy generated from its project.

The state regulator observed that their actions in denying open access were uncalled for.

The Commission further pointed out that the energy fed into the grid from the date of synchronization until open access approval is to be treated as banked energy. The regulatory body stated that the DISCOM and the nodal agency have not allowed open access for two years and are liable to pay the charges for the energy drawn by it.

In its analysis, the Commission said that the petitioner applied for open access on July 18, 2018, whereas the respondents had stated that the applicant had applied on August 06, 2018. TSTRANSCO took one month to forward the application to the DISCOM for ascertaining the feasibility of providing open access to the petitioner. The order added that the nodal agency should have intimated about the feasibility of open access facility within 30 days from the date of the application.

Keeping all the facts in mind, the Commission directed both the respondents to immediately provide Ener Sol Infra with long-term intra-state open access. It also asked them to make the necessary payment to the petitioner.

Provisions around open access and banked energy are not consistent across states, leading to a slew of petitions to the state commissions revolving around these issues.

For instance, recently, the Tamil Nadu Electricity Regulatory Commission asked the Tamil Nadu Generation and Distribution Company to pay for the unutilized banked energy to Arulmozhi Spinning Mills Private Limited. The Commission noted that the payment for unutilized energy and cross-subsidy surcharge collection were two different issues and cannot be linked together. The Commission stated that it was not fair on the part of TANGEDCO to withhold payment for unutilized banked energy on the grounds of non-payment of cross-subsidy surcharge.

 

Mercom’s Renewable Energy Regulatory Updates cites a similar order passed recently in which the Joint Electricity Regulatory Commission for Goa and union territories ruled in favor of a solar company seeking connectivity and exemptions under the open access regulations.