Regulator Asks DISCOM to Pay Interest on Delayed Payments to Wind Developer
The Maharashtra Commission asked MSEDCL to clear the amount within 30 days
The Maharashtra Electricity Regulatory Commission (MERC) has directed the Maharashtra State Electricity Distribution Company (MSEDCL) to pay ₹2.62 million (~$32,073) to a wind developer as interest on delayed payment charges.
Ghatge Patil Industries (GPIL) had sought directions against MSEDCL for the recovery of delayed payment charges along with the accrued interest amount against invoices generated under the energy purchase agreements (EPAs).
Background
GPIL had entered into various EPAs with MSEDCL for the sale of power generated by its wind projects in Maharashtra.
GPIL had been raising monthly invoices for the power generated and supplied to MSEDCL under the EPAs. MSEDCL was required to make payment within 45 days of receiving the monthly bills. In case of delay in payment beyond the due date, GPIL was entitled to interest at 2% per annum above the State Bank of India’s short-term lending rates.
However, there were consistent failures on the part of MSEDCL to make timely payments. The wind generator approached the Commission on various occasions seeking timely payments from MSEDCL.
After the order in 2017, MSEDCL made a partial payment on November 27, 2017, but did not make further payments despite numerous reminders.
GPIL was compelled to issue an EPA termination notice in January 2018 to come into effect from February 1, 2018.
Later, MSEDCL admitted the liability to pay ₹3.78 million (~$46,274). However, as per GPIL, such an amount was ₹4.21 million (~$51,538). On April 26, 2021, after more than three years, MSEDCL belatedly released the said amount of ₹3.78 million.
MSEDCL clarified that it had already paid the reconciled amount of ₹3.78 million (~$46,274) to GPIL on April 26, 2021. It had also paid the interest accrued on the delayed payment charges at 15% per annum on December 28, 2021, for the period between August 2014 and July 2018. Hence, no outstanding amount was payable to GPIL.
Commission’s analysis
The Commission noted that GPIL had claimed penal interest at 1.25% per month. As per GPIL’s computations, the penal interest worked out to be ₹3.21 million (~$39,296).
The Commission observed that during scrutiny of the claim sheet submitted by MSEDCL, it was evident that it had considered the interest rate as 10.25% per annum. Whereas in the affidavit, MSEDCL mentioned that it had settled penal interest at the rate of 1.25% per month (15% per annum).
Such contradictory statements involving money matters were unacceptable from a distribution company (DISCOM) like MSEDCL.
The state regulator noted that MSEDCL had partially settled delayed payment charges and, based on reconciliation, paid ₹3.78 million (~$46,274). The DISCOM had not considered interest on the entire delayed payment charges paid belatedly and some amount of delayed payment charges on earlier dates.
Accordingly, the Commission directed MSEDCL to pay the balance penal interest amount of ₹2.62 million (~$32,073) within 30 days of the order.
Last October, MERC directed MSEDCL to pay a late payment surcharge to a wind developer from March 15, 2017, to March 2020, within a month.
Earlier, MERC had ruled in favor of a wind power developer and said that it was eligible for a late payment surcharge for January 2017 and from April 2017 to February 2018 with an interest of 1.25% per month on the outstanding amount.
Subscribe to our real-time Regulatory Updates to ensure that you never miss any critical updates from the renewable energy industry.
Get the most relevant India solar and clean energy news.
RECENT POSTS
LATEST HEADLINES
Maharashtra Approves Tariffs for 8.7 MW of Solar Power Under KUSUM Program
Mar 21, 2023
Brookfield to Aquire KKR’s 50% Stake in Renewable Developer X-Elio
Mar 21, 2023
NTPC’s Subsidiary Will Develop Renewable Projects for IndianOil Refineries
Mar 21, 2023
Constant Climate-Centric Funding Can Limit Global Temperature Under 1.5°C
Mar 21, 2023
India Voices Concern over Europe’s Carbon Tariff Measure at WTO
Mar 21, 2023
India added 2.5 GW of solar open access in the calendar year (CY) 2022, a year-over-year (YoY) increase of 92% from the 1.3 GW installed in CY 2021, according to the newly released 2022 Q4 & Annual Mercom India Solar Open Acce...
March 15, 2023
Solar
Kerala Issues Empanelment Tender for 100 MW of Solar ProjectsThe Kerala State Electricity Board (KSEB) has invited bids to empanel solar developers to set up 100 MW of grid-connected rooftop and ground-mounted projects. Empanelled vendors also must furnish operation and maintenance (O&M...
March 20, 2023
Tenders and Auctions
Gujarat Invites Bids to Procure 500 MW of Wind Power with Greenshoe OptionGujarat Urja Vikas Nigam (GUVNL) has invited bids to procure power from 500 MW of grid-connected wind projects (Phase V) with a greenshoe option of an additional capacity of up to 500 MW. The last day to submit the bids online is ...
March 17, 2023
Rooftop
MSMEs Adopt Solar Readily If Savings on Power Bills Cover EMI Cost: InterviewSmall businesses are open to adopting rooftop solar if loan repayment is not an additional burden and is equal to their savings on electricity bills. Entities in the commercial and industrial (C&I) segment are increasingly mov...
March 17, 2023
Trending News
Tender & Auctions
Indian Oil Floats O&M Tender for 8 MW Solar Project in Ahmedabad
March 14, 2023
Technology
Researchers Find Solution to Manage Load in Solar PV & Storage Systems
February 28, 2023
February 27, 2023
February 24, 2023
January 17, 2023
Magazine
Grid
Sterlite Bags ISTS Project to Evacuate 20 GW of Renewables in Rajasthan
March 13, 2023
Latest News
The Maharashtra Electricity Regulatory Commission (MERC) has adopted tariffs of ₹3.28 (~$0.039)/kWh, ₹3.29 (~$0.039)/kWh, and ₹3.30 (~$0.040)/kWh for the procurement of 8.7 MW of solar power on a long-term basis. The Commission...
March 21, 2023
Global investment firm Kohlberg Kravis Roberts (KKR) has agreed to sell 50% of its stake in renewable developer X-ELIO to its joint venture partner Brookfield Renewable. Financial details were not disclosed. Since KKR’s...
March 21, 2023
NTPC Limited’s wholly owned subsidiary, NGEL, has entered into a joint venture agreement with Indian Oil Corporation (IOCL) to develop renewable energy projects that can meet round-the-clock power requirements to meet the...
March 21, 2023
Financial support from developed economies to developing nations which is a critical enabler of climate action has been inadequate, said scientists in the latest Intergovernmental Panel on Climate Change (IPCC) report...
March 21, 2023
India has expressed concern about the carbon border measures proposed by the European Union (EU) at a recent meeting of the World Trade Organization’s (WTO) Committee on Trade and Environment. Presenting a paper on the increasing...
March 21, 2023
JSW Neo Energy (JSW Energy) and Greenko KA 01 IREP (Greenko) have won the Power Company of Karnataka’s (PCKL) auction to supply 1 GW of energy for 8 hours daily from pumped hydro storage projects providing continuous 5-hour...
March 21, 2023
Sterling and Wilson Renewable Energy, the solar engineering, procurement, and construction (EPC) arm of Shapoorji Pallonji Group, won NTPC’s tender for the balance of system (BOS) package to develop 1.2 GW (4*300 MW) of solar...
March 21, 2023
Indian Oil Corporation (IOCL) has invited bids for the operation and maintenance (O&M) of an existing 8 MW solar power project at the LPG bottling plant at Sanand in Ahmedabad for five years. The last date to submit the bids...
March 21, 2023
Researchers at the Indian Institute of Technology Mandi (IIT Mandi) have claimed a breakthrough in producing metal oxide layers for use in advanced architecture silicon solar cells using a cost-effective method. This innovative...
March 21, 2023
The government has allowed NTPC to invest in its subsidiary, NTPC Green Energy (NGEL), beyond the limit allowed for a ‘maharatna’ central public sector enterprise (CPSE). The extant guidelines prescribe a ceiling of 30% of a...
March 21, 2023
Get the most relevant India solar and clean energy news.
POPULAR POSTS
Maharashtra Approves Tariffs for 8.7 MW of Solar Power Under KUSUM Program
Mar 21, 2023
Brookfield to Aquire KKR’s 50% Stake in Renewable Developer X-Elio
Mar 21, 2023
NTPC’s Subsidiary Will Develop Renewable Projects for IndianOil Refineries
Mar 21, 2023
Constant Climate-Centric Funding Can Limit Global Temperature Under 1.5°C
Mar 21, 2023
India Voices Concern over Europe’s Carbon Tariff Measure at WTO
Mar 21, 2023
JSW and Greenko Win Karnataka’s Bid for 1 GW of Pumped Storage Projects
Mar 21, 2023
Sterling and Wilson Bags BoS Package Tender for 1.2 GW Solar Projects
Mar 21, 2023