Delhi Penalizes Three DISCOMs for Defaulting on Renewable Purchase Obligations

The commission asks distribution companies to pay the penalty within a month


Delhi Electricity Regulatory Commission (DERC) has imposed penalties of ₹17.2 million (~$240,000) on Tata Power Delhi Distribution Limited (TPDDL) and ₹28.8 million (~$410,000) each on BSES Yamuna Power Ltd. (BYPL) and BSES Rajdhani Power Ltd. (BRPL). The penalties have been imposed for defaulting on renewable energy purchase obligations (RPO) for three financial years.

The commission has ordered the distribution companies (DISCOMs) to pay the penalty within a month.

“Penalizing DISCOMs for non-compliance of RPO is a rare and welcome occurrence. Hopefully, this sets a precedent that other state regulatory commissions can follow. Non-compliance of RPOs is the biggest culprit when it comes to solar and wind procurement in the country,” said Raj Prabhu, CEO of Mercom Capital Group.

The petition was filed by Green Energy Association and the Indian Wind Power Association (IWPA) before the commission against TPDDL, BYPL, and BRPL. The petition was filed for non-compliance of RPO for FY 2012-13 to 2014-15 by the three DISCOMs of Delhi.

The petitioners had alleged that the commission had allocated funds to the distribution companies (DISCOMs) for the purchase of renewable energy certificates (RECs) to meet the RPO, and even when RECs were available in the market, no efforts were made by the DISCOMs to fulfill their RPO.

After considering the submissions of the DISCOMs, a show-cause notice was issued against the petition filed by the Green Energy Association.

However, before the final order was pronounced, BRPL and BYPL filed petitions before the commission seeking an extension of time for fulfilling the RPO.

The commission, in its order, observed, “There is no doubt that DISCOMs have failed to meet their RPO. Keeping in view all factors and various directions of the Appellate Tribunal for Electricity (APTEL), it is established that the failure of DISCOMs to meet the RPO make them liable to pay penalty.”

A penalty of ₹100,000 (~$1,409) for each year of default and an additional ₹5,000 (~$70.45)/day fine for continuing to default until DISCOMs met the RPO for a given year, was imposed by the commission.

The order stated that BRPL and BYPL had reported no compliance of RPO, and they are in continuous default of meeting the RPO.

In January 2019, Mercom had reported that DERC issued draft regulations for the implementation of renewable purchase obligation and renewable energy certificate frameworks. This was a move in the right direction by the Delhi commission, considering the poor record of states in adhering to RPO targets.

In the past, rather than imposing a penalty on defaulters, the DERC allowed DISCOMs to carry the shortfall forward to the next year, and as a result, the exemption did not include a penalty.