GERC Rules Power Entities Must Refund Excess Charges to Solar Developers

This order pertains to various billing elements, including cross-subsidy surcharge

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Gujarat Electricity Regulatory Commission (GERC) has mandated that the Uttar Gujarat Vij Company, Gujarat Energy Transmission Corporation, and the Energy and Petrochemicals Department should reimburse the amounts that were excessively charged to the solar developers.

This was done following provisions pertaining to billing elements, including cross-subsidy surcharge, additional surcharge, wheeling charges, wheeling losses, transmission charge, transmission loss, and the handling of any surplus energy.

The Commission also ruled that the developers are eligible for relief due to delays caused by the Gujarat power entities and the COVID-19 pandemic.

Background

The petitioners, Arka Energy, Aditya Energy, Asandas and Sons, and Sainest Tubes, filed petitions seeking a directive for the respondents to issue invoices according to the Gujarat Solar Policy, 2015, and the GERC order of 2015.

The respondents in the case were Uttar Gujarat Vij Company, Gujarat Energy Transmission Corporation, and the Energy and Petrochemicals Department.

The petitioners contested the imposition of a cross-subsidy surcharge, additional surcharge, and wheeling losses on the energy they supplied from their solar power project to the place of consumption.

The petitioners have established a 1.71 MW solar power project within Uttar Gujarat Vij Company’s licensee area.

Uttar Gujarat Vij Company is a distribution licensee, while Gujarat Energy Transmission Corporation operates as a transmission licensee and State Transmission Utility in Gujarat.

The petitioners applied to Uttar Gujarat Vij Company for power evacuation from their solar power project.

Despite the petitioners’ initial agreements and payments, issues arose regarding the procurement and installation of necessary equipment due to various reasons, including delays related to the COVID-19 pandemic and lockdown restrictions.

After several communications and approvals, the solar project was commissioned on August 7, 2020, with electricity generation commencing.

The petitioners requested refunds for amounts paid for undelivered equipment and cited relevant government memorandums and notifications regarding project commissioning extensions and policy amendments.

They also sought a refund of the charges for the 11 KV feeder panel to Arka Energy and Aditya Energy with 18% interest. They sought a ruling that the respondents are jointly liable for the delay in the commissioning of the project of both Arka and Aditya Energy and are therefore liable to pay ₹6.3 million (~$75,957) with 18% interest.

They also requested a refund of excessive billings raised retrospectively on Asandas and Sons and Sainest Tubes following their representation on October 25, 2021.

The petitioners wanted Uttar Gujarat Vij Company to repay the dues of ₹1.6 million (~$19,699)with 18% interest to Arka and Aditya Energy.

They claimed that Uttar Gujarat Vij Company had excessively charged cross-subsidy, additional surcharge, and wheeling losses from Asandas and Sons, making them liable to repay ₹3.1 million (~$37,639) and credit 2,66,184 units.

Similarly, they contended that Uttar Gujarat Vij Company had excessively charged cross-subsidy, additional surcharge, and wheeling charges from Sainest Tubes, too, making them liable to repay ₹898,292 (~$10,810) and credit 70,535 units.

The petitioners sought an award of ₹1 million (~$12,033)/ for the loss of opportunity and capital stagnation, along with any other appropriate orders in the interest of justice.

Commission’s Analysis

The Commission found that the 1.71 MW solar power project owned by the petitioners qualified for relief under the conditions outlined in Order No. 3 of 2015, as determined by the GERC Commission.

The applicable charges, including cross subsidy surcharge, additional surcharge, wheeling charges, wheeling losses, transmission charge, transmission loss, and the treatment of surplus energy (if any) after set-off from the petitioner solar power plant rate and energy accounting, were determined as per Order No. 03 of 2015 dated August 17, 2015.

The claims for any alleged loss due to non-generation from the petitioners’ solar power project are rejected.

The respondents were instructed to refund the amount collected contrary to the decision and provisions of Order No. 03 of 2015 concerning various billing aspects.

It directed Uttar Gujarat Vij Company and Gujarat Energy Transmission Corporation to reimburse the petitioners for the funds they received for 11 KV feeder panels.

The Commission noted that the failure of these two entities to supply panels for an extended period, from January 29, 2020, to March 20, 2022, forced the petitioners to procure and install the panels themselves, leading to delays in the project’s commissioning.

The respondents’ delay in approving the drawings of feeder panels also contributed to the project’s commissioning delays.

The commissioning of the petitioners’ solar power project was delayed due to the COVID-19 pandemic and associated governmental lockdowns and restrictions.

This delay, which occurred from March 25, 2020, to August 7, 2020, was a force majeure event beyond the control of the petitioners. Additionally, delays from March 3, 2020, to August 7, 2020, due to the respondents’ failure to provide feeder panels after receiving payment and the pandemic-related restrictions also qualified as force majeure events.

The Commission, therefore, noted that the petitioners were eligible for relief due to these delays.

Earlier, GERC allowed net metering for rooftop solar systems with a capacity of 1 kW and up to 1 MW. Gross metering was permitted for rooftop solar systems with 10 kW and up to 1 MW capacity.

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