Karnataka Regulator Condones Delay in Solar Project Commissioning

A tariff of ₹8.40/kWh is allowed as agreed in the PPA


Karnataka Electricity Regulatory Commission (KERC) has condoned the delay in the commissioning of solar power projects by a developer and allowed the extension of the scheduled commercial operation date (SCOD).

Consequently, a tariff of ₹8.40 (~$0.10)/kWh is allowed as agreed in the power purchase agreement (PPA).


Jigajinagi Jagtap Solar Energy sought approval for a supplemental agreement dated April 21, 2017, which it entered into with Hubli Electricity Supply Company (HESCOM).

The respondents were HESCOM, Department of Energy, Karnataka Renewable Energy Development (KREDL), and Karnataka Power Transmission Corporation (KPTCL).

The petitioner wanted HESCOM to make payments for energy delivery at ₹8.40 (~$0.10)/kWh from the COD of its solar project throughout the term of the power purchase agreement (PPA).

PPAs were signed on July 13 and 14, 2015, and approved by the Commission on July 31, 2015.

On April 21, 2017, supplementary PPAs were entered into by the petitioners’ special purpose vehicle (SPV) with HESCOM.

Due to delays in project commissioning beyond the SCOD, Jigajinagi Jagtap Solar Energy secured a six-month extension from HESCOMIn its petition, the developer urged HESCOM to adhere to the PPA terms and make payments at the agreed tariff of ₹8.40 (~$0.10)/kWh.

While HESCOM and KPTCL said they had no objection to the relief sought, KREDL asserted that it was not a party to the petition and sought dismissal of the petitions.

The Commission issued an order on November 22, 2018, ruling that the petitioners were entitled to a tariff of ₹4.36 (~$0.05)/kWh, applicable from the commissioning date of the project.

The solar developer was directed to fulfill payment obligations for damages and liquidated damages as per the PPA.

The petitioner approached the Appellate Tribunal for Electricity (APTEL), seeking that the case be remanded to the state commission for proper disposal.

APTEL accepted the request and remitted the case back to the state commission.

Commission’s Analysis

The Commission acknowledged the challenges in executing the project within the SCOD in the face of delays in obtaining permissions, approval of PPA and SPPA, demonetization, delays in power evacuation approvals, and safety approvals.

Consequently, the delay in commissioning the projects should be attributed to force majeure events, a fact acknowledged by the respondents in their communications and extensions approved by the Commission.

The Commission noted that the developer was entitled to a tariff of ₹8.40 (~$0.10)/kWh since the project was commissioned within the extended time granted by the respondents.

As per the generic tariff order, the approved tariff is applicable to solar power generators entering into PPAs between April 1, 2013 and March 31, 2018.

The Commission ruled that the solar developer petitioner is entitled to the tariff as per the PPA from the date of COD.

It also directed HESCOM not to levy liquidated damages, and if already levied, the same must be refunded to the petitioner within two months.

The Commission directed HESCOM to pay the differential tariff within 90 days,  failing which the petitioner is entitled to interest at 10%.

Recently, KERC approved the group captive status of a 38 MW wind power project for Four EF Renewables.

In June, KERC clarified various rules in the state’s Terms and Conditions for Green Energy Open Access Regulations 2022.

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