Rajasthan Amends Regulations for REC and RPO Compliance Framework

Regulations to come into force from April 1, 2019


The Rajasthan Electricity Regulatory Commission (RERC) has issued new amendments to its regulations on renewable energy certificate and renewable purchase obligation compliance framework passed in 2010.

The new regulations will come into effect from April 1, 2019.

Key Highlights

  • For distribution licensees (DISCOMs), the effective electricity component price applicable to the projects commissioned up to March 31, 2019 and covered under REC mechanism will be equal to the pooled cost of power purchase which has been capped at average of pooled cost of power purchase for Jodhpur Vidyut Vitran Nigam Limited (JdVVNL) for the period from FY 2011-12 to FY 2016-17, at ₹3.14 (~$0.045)/kWh.
  • This rate will remain applicable for its remaining useful life for which power purchase agreement (PPA) will be executed.
  • Such projects can also use such electricity for self-consumption or sell it at a mutually agreed price to other entities.
  • Purchase of electricity from the renewable energy generator under REC mechanism will not be counted towards the fulfillment of RPO.
  • In case the REC mechanism is repealed, the renewable energy generator can sell power to DISCOMs or sell renewable energy at a mutually agreed price to other obligated entities or may use it for self-consumption.

In February 2019, the RERC had issued a notice inviting suggestions from interested parties before finalizing the REC RPO Compliance Framework Regulations 2019. RERC received comments and suggestions from 83 stakeholders. The commission observed that during the last seven to eight years, the pooled cost has been fluctuating on higher or lower sides as compared to previous years and same had been applicable to all projects covered under the REC mechanism. This has been accepted by all the renewable energy generators covered under the program.

Considering the latest trends in the pricing of renewable energy, submission of the DISCOMs, renewable energy generators and the provision regarding the exercise of powers for the review of pricing methodology, the RERC decided to cap the price of electricity component prospectively.

According to the RERC, as the pooled cost rate is being capped, the DISCOM will monitor the same and file petition for determination of pooled cost when the need arises.

Recently, the state commission also issued the fifth amendment to its regulations for RPO. In the newly amended regulations, the commission has revised the renewable purchase obligation for the financial year 2018-19 to 4.75 percent from the earlier rate of 6.75 percent. According to the RERC, revised RPO for FY 2018-19 will be applied retroactively from April 1, 2018.

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.