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					</table><p>The Appellate Tribunal for Electricity (<a href="https://aptel.gov.in/" target="_blank" rel="noopener">APTEL</a>) has upheld the Rajasthan Electricity Regulatory Commission’s (<a href="https://rerc.rajasthan.gov.in/" target="_blank" rel="noopener">RERC</a>) decision dismissing a petition filed by a wind energy generator contending that regulations should not retroactively impact power purchase agreements (PPA).</p>
<p><strong>Background</strong></p>
<p>As a wind energy generator, <a href="https://www.mangalamcement.com/" target="_blank" rel="noopener">Mangalam Cement</a> challenged the dismissal of its petition by the RERC. The appeal sought to void an electricity bill and two letters issued by Jaipur Vidyut Vitran Nigam (<a href="https://energy.rajasthan.gov.in/jvvnl/#/home/dptHome" target="_blank" rel="noopener">JVVNL</a>), demanding compliance with the PPA terms and claiming interest on the ₹8.44 million (~$101,462) deposited with JVVNL.</p>
<p>The petitioner set up projects in Rajasthan in 2007, 2008, and 2010, with PPAs signed for 20 years. However, issues arose with the 2014 RERC tariff regulations designed for a five-year control period from April 1, 2014, to March 31, 2019. JVVNL applied these regulations to Mangalam Cement&#8217;s PPAs, resulting in a disputed bill.</p>
<p>The 2004 policy of the state government mandates wheeling charges and offers power banking options with distribution companies, with payments based on unutilized energy at the pooled rate.</p>
<p>In contrast, the 2014 tariff regulations aim to alter these provisions, reducing the banking period to one month and limiting the power producer&#8217;s entitlement to 10% of unutilized banked energy at 60% of the large industrial power tariff.</p>
<p>Mangalam Cement argued before RERC that the 2009 and 2014 regulations should not apply retrospectively to its PPAs.</p>
<p>Disagreeing with Mangalam Cement, RERC upheld its earlier order and dismissed the review petition.</p>
<p>The petitioner argued that the 2014 regulations are inapplicable to their PPAs as these regulations target cases requiring tariff determination during a control period, which does not apply in this case.</p>
<p><strong>Commission’s Analysis</strong></p>
<p>The Tribunal observed that the wheeling and banking agreement specifies payment for unutilized banked energy at 60% of energy charges applicable for large industrial power tariffs, with a clause stating that the banking of energy is subject to RERC orders and amendments. This, the Tribunal found, was indicative of an intention not to maintain a fixed payment structure for unutilized banked energy throughout the entire 20-year period.</p>
<p>Agreeing with RERC&#8217;s observations, the Tribunal noted that tariff charges cannot remain static, requiring periodic determination based on licensee costs and prevailing factors. While the 2014 tariff regulations are applicable for a five-year control period, it was equally true that their non-applicability to previously executed wheeling and banking agreements is not explicitly stated.</p>
<p>Citing a Supreme Court&#8217;s judgment, the Tribunal emphasized that regulations under Section 178 of the Indian Electricity Act intervene and supersede existing contracts, obliging regulated entities to align contracts with new regulations. Consequently, pre-existing PPAs must be adjusted and harmonized with regulations introduced post-execution.</p>
<p>Based on this legal precedent, the Tribunal concluded that the Mangalam Cement&#8217;s case is subject to the 2014 regulations, which take precedence over existing PPAs. Therefore, the agreements must be modified and aligned with the 2014 regulations.</p>
<p>In September, RERC <a href="https://www.mercomindia.com/rajasthan-five-year-extension-expired-ppas-wind-projects/" target="_blank" rel="noopener">granted</a> approval to Rajasthan Urja Vikas Nigam to extend the PPAs with 12 wind power generators by five years.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don’t miss any critical updates from the renewable industry.</p>


Tribunal Upholds RERC Order Rejecting Claim Against Retroactive Impact on PPAs

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