APTEL Sets Aside TNERC Order, Says Solar Developer Entitled for Preferential Tariff
TANGEDCO had argued that the renewable projects were not commissioned within the control period
October 10, 2022
The Appellate Tribunal for Electricity (APTEL) has ruled in favor of a solar developer and said that the developer is entitled to a tariff of ₹7.01 (~$0.085)/kWh as it commissioned its projects before the control period, which commenced on March 31, 2016.
As per the power purchase agreement (PPA) signed with Tamil Nadu Generation and Distribution Corporation (TANGEDCO), the developers were required to commission their projects before the control period, i.e., on or before March 31, 2016, to avail of the preferential tariff of ₹7.01 (~$0.085)/kWh as declared by Tamil Nadu Electricity Regulatory Commission (TNERC).
In May 2015, Kamuthi Solar, a subsidiary of Adani Green Energy (AGEL) proposed to set up 216 MW of solar projects at Sengapadai and Pudukottai Villages in Ramnad District. Ramnad Renewable, another AGEL subsidiary, also proposed establishing a 72 MW solar project at Karisalkulam village in Ramnad District.
In June 2015, the developers told TANGEDCO that they would not claim any deemed generation or any other benefits from TANGEDCO if Tamil Nadu Transmission Corporation (TANTRANSCO) could not commission the proposed 400 kV substation at Kamuthi in Ramnad District.
In response, TANGEDCO proposed to interface the two power projects with the grid at the sanctioned new substation at 110 kV level by erecting a 110 kV line for a distance of 8 kilometers connecting the proposed projects and the new substation. The grid connectivity was to be given only after the new substation’s commissioning.
A PPA was signed between the developers and TANGEDCO. As per the PPA, the developers were required to commission their projects before March 31, 2016, to avail of the preferential tariff of ₹7.01 (~$0.085)/kWh as declared by TNERC.
The projects were delayed for over a month, with unprecedented rainfall recorded in Ramnad District, adversely affecting the construction of the two projects. The evacuation system was also not completed. Therefore, the developers sought temporary evacuation from an alternative substation, anticipating a delay in commissioning the Kamuthi substation.
Subsequently, the Chief Electrical Inspector of the Government noted that the projects could not be completed as the evacuation facility was delayed, putting the commissioning before the cut‐off date of March 31, 2016, at risk. The developers requested the Chief Engineer to consider the alternative proposal by permitting them to evacuate power through one circuit of the 110 kV D/C Kamuthi substation to the new substation line, as their projects were ready for evacuation of power.
TANGEDCO alleged that the projects were not ready for commissioning and that the developers were not entitled to claim any deemed generation or other benefits from TANGEDCO, even if TANTRANSCO failed to commission the Kamuthi substation on time.
The developers rejected TANGEDCO’s contention that the projects were incomplete and reiterated that the projects were ready for commissioning. They were also aggrieved by TANGEDCO’s failure to provide grid connectivity and not recognizing the projects as deemed commissioned before March 31, 2016.
TANGEDCO submitted that the developers had given an undertaking that no deemed generation and any other benefit would be claimed against TANGEDCO if the 400 kV Kamuthi substation was delayed. TANGEDCO claimed that ‘any other benefit’ specified in the undertaking included the tariff of ₹7.01 (~$0.085)/kWh.
The developers had approached TNERC, and the Commission directed them to approach APTEL. The Tribunal directed TNERC to treat the petition as a miscellaneous petition and not as a dispute resolution petition. However, TNERC rejected the petition of the developers.
APTEL accepted the developers’ contention that the projects were ready to commence supply within the control period. It noted that TANGEDCO could have easily provided temporary connectivity to establish the claim of the developers regarding the commissioning of the projects.
It noted that TANGEDCO was raising various issues without proof that the projects were not ready for commissioning to shield its failure to provide the evacuation facility on time.
APTEL also rejected TANGEDCO’s contention that the tariff of ₹7.01 (~$0.085)/kWh fell under ‘any other benefit’ specified in the undertaking.
The Tribunal ruled that Kamuthi Solar Power and Ramnad Renewable Energy were entitled to a tariff of ₹7.01 (~$0.085)/kWh as they commissioned their projects before the control period mentioned in TNERC’s order.
Recently, APTEL ruled that Walwhan Renewable Energy was entitled to the effective tariff of ₹7.09 (~$0.089)/kWh and ₹7.01 (~$0.085)/kWh for two projects of 50 MW each from Bangalore Electricity Supply Company (BESCOM).
Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.