DISCOMs Sidestep Developers and Approach Commission to Amend Renewable PPAs

The DISCOMs have proposed a billing date change citing the delay in cost computing


The Southern Power Distribution Company of Telangana (TSSPDCL) and the Northern Power Distribution Company of Telangana (TSNPDCL) have filed a petition with the Telangana State Electricity Regulatory Commission (TSERC) seeking its approval to amend the power purchase agreements (PPAs) to shift the billing cycle for renewable energy projects from 24th and 25th of each month to 1st of the calendar month.

Telangana DISCOMs have taken the unusual route of approaching the Commission directly for the change in PPA terms without first consulting the project developers.

The DISCOMs have proposed the change citing the delay in bill computing to include fuel surcharge and fuel cost adjustments as the reason.

The proposed amendment, if approved, will come into effect from April 1, 2023, and provide the DISCOMs an extension of approximately a week more for calculating the billed amount.

The concerned project entities, including the project developers and investors, have time until June 21, 2023, to submit their suggestions.

Speaking on the petition, Aaditya K Singh, Associate Partner at Dentons Link Legal, said, “Post execution of the PPA, the intervention of the regulatory commission is limited in terms of provisions of the PPA. The Telangana state DISCOMs are bypassing the provisions of the PPA and intending to approach the state regulator to seek an amendment directly.”

“TSERC should have directed the DISCOMs to approach all developers individually. Post-taking consent, the DISCOMs should have filed the petition. Instead of rejecting the petition, TSERC has admitted the petition and has invited a public hearing. The Supreme Court, in the Maharashtra State Electricity Distribution Company and Solar Semiconductor dispute, had specified the limited role of electricity commissions in interfering with the terms of the PPA,” Singh added.

If approved, the ruling will have implications for many other projects and set a precedent in the state and across India, where the DISCOMs could approach the regulatory authorities without first consulting with the counterparties.

DISCOMs, in their submission, cited the terms of Regulation Number 1 of 2023 (Terms and Conditions for Determination of Tariff for Wheeling and Retail Sale of Electricity), under which the distribution company (DISCOM) is entitled to recover or refund the charges on account of fuel surcharge adjustment and fuel cost adjustment.

DISCOM is entitled to levy fuel cost adjustment charges as per the voltage level on the consumed units during the billing month as part of the retail supply tariff payable by the consumer.

The DISCOMs have added that for the delivered energy, the solar power developer should furnish a bill calculated at a tariff agreed upon between the DISCOM and the developer for the billing month on or before the second working day following the meter reading date.

In February last year, the Supreme Court rebuked the Andhra Pradesh DISCOMs attempting to terminate the PPA unilaterally after the project developer had set up the project. The Apex Court has said that the state regulatory commission must be guided by public interest while approving the tariffs for power purchases.

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