Himachal Pradesh Issues Order on RPO Targets and Open Access Charges

Open access charges waived off for small hydro projects commissioned after May 15, 2018


The Himachal Pradesh Electricity Regulatory Commission (HPERC) has issued an order for distribution companies (DISCOMs) in the state regarding their renewable purchase obligation (RPO) backlogs up to the financial year (FY) 2020

The Himachal Pradesh State Electricity Board Limited (HPSEBL) had filed a petition with the HPERC for the first annual performance review order under the fourth control period (FY 2020 to FY 2024) and the determination of tariff for FY2021.

RPO Requirements

The Commission reviewed the performance of state DISCOMs in terms of meeting their RPO targets. The Commission said that the state electricity board had to purchase power from renewable sources to meet its obligation of 9.5% from non-solar and 4.75% from solar power for the FY 2018.

The board had asked the Commission to adjust the shortfall of 131.72 million units (MUs) in non-solar RPO against the surplus of 230.23 MUs for the FY 2018. HPSEBL had a deficit of 11.68 MUS for the FY 2018 and had proposed to meet this deficit by renewable energy certificates (REC), which it received against the surplus solar power of 15.28 MUs during FY 2016-17.

HPSEBL had submitted that it would require 220.51 MUs of solar and 311.76 MUs of non-solar power for the FY 2020. Similarly, for FY 2021, it will require 288.12 MUs of solar and 337.52 MUs of non-solar power. The solar power RPO shortfall amounted to 126 MUs for FY 2020, and 193.6 MUs for FY 2021.

Based on this submission, the Commission approved the RPO status for FY 2018. For the FY 2018, Himachal Pradesh’s requirement within the state stood at 9,351.4 MUs, while the requirement within the state excluding hydro was 1,611.4 MUs. The solar RPO target for FY 2018 was 76.5 MUs. The total solar purchase accounted for 64.9 MUs, and the net deficit for the FY 2018 was 11.7 MUs.

Himachal Pradesh Status of RPO Target FY 2018

The Commission further noted that the state electricity board had hydropower projects that qualify under the renewable power projects. For FY 2021, the Commission noted that the energy generated from small hydro generation would be 472.61 MUs.

The Himachal electricity board had submitted that balance solar power if needed, might be adjusted from excess non-renewable power available for FY 2020-21.

The Commission noted that HPSEBL would procure 20.87 MUs of solar power from Singrauli solar project, 43.36 MUS from SECI, and 73.3 MUs from additional private solar projects. The Commission directed HPSEBL to undertake the procurement of sufficient solar power or REC certificates to meet any shortfall in the solar RPO requirement for the FY 2020-21.

The Commission noted that the minimum purchase from renewable sources for the FY 2020-21 should be 10.25% for non-solar and 8.75% for solar. The Commission said that based on the energy availability from non-solar and solar sources, HPSEBL is expected to meet its RPO targets during FY 2020-21.

Open Access

The Commission had permitted open access to all the generators irrespective of installed capacity and to all the consumers having contract demand above 1 MVA.

To promote generation from renewable sources, the Commission said that the wheeling charges payable by small hydro projects would be comparable to the wheeling charges for the extra-high voltage (EHV) category of open access consumers for FY 2020-21.

However, the renewable energy generator will have to bear the losses as per the actual connected voltage level. These concessional wheeling charges will not be available to the renewable generators selling power under the REC framework.

The Commission further noted that the Government of Himachal Pradesh has decided to waive off open access charges payable by hydro projects having a capacity of up to 25 MW, which have been commissioned after May 15, 2018, for the use of intrastate transmission network. The Commission clarified that the HPSEBL would be required to recover the wheeling charges from these generators as determined by the Commission.

The Commission further noted that according to the state regulations, the consumers availing open access would have to pay the distribution licensees a cross-subsidy surcharge.

In January this year, HPERC issued generic levelized tariffs for solar PV projects for the last six months of the financial year 2019-20. In December 2019, the Commission had requested the major stakeholders to send their suggestions on the proposal.

Earlier, HPERC had finalized the amendments to its regulation on the deviation settlement mechanism. The state commission had proposed the amendments in May 2019 and had provided stakeholders with 30 days to revert with their comments and suggestions.