Torrent Power Gets Approval for Deviation in Guidelines to Procure Solar and Wind Power

Torrent Power had sought approval for deviations from MoP guidelines for solar and wind tenders


The Gujarat Electricity Regulatory Commission (GERC) has approved Torrent Power’s petitions for the acceptance of deviations from the Ministry of Power (MoP)’s guidelines for the procurement of solar and wind power.

Torrent Power had sought permission to procure wind and solar power to meet its renewable purchase obligation (RPO). It had petitioned the GERC to approve the deviations sought for the procurement of both wind and solar as indicated in the guidelines under Clause 7.4: Payment Security; Clause 7.8: Change in Law and Clause 9.1: Bid Responsiveness.

Torrent Power had submitted that the concept of Payment Security Fund with the corpus to cover three months’ billing payment is meant for the programs or tendering processes that have been initiated by the implementing agencies like the Solar Energy Corporation of India (SECI) to ensure timely payments to the generators, to cover the delays or defaults in payment by the buying entities.

In its submission, the firm mentioned that it has an excellent track record of making timely payments to all suppliers prior to the due date. Hence, the waiver of additional provision of Payment Security Fund has been requested as it will only lead to unnecessary blockage of funds and associated costs, which  ultimately would create burden on the end consumer.

Torrent Power had requested that the Clause 7.8 be modified to provide for Change in Law in terms of additional tax on the generation or sale of electricity to be a pass-through. Any Change in Law which directly affects the sale of electricity can be evaluated easily and the same can be allowed as a pass-through without disturbing the tariff discovered under the competitive bidding.

Torrent Power had also proposed to remove the word “Willful” from the term “Willful defaulter” on the ground that this would enhance the certainty of implementation of the project since no financial institution would agree to extend the loan to a willfully defaulting company or its affiliates and that the proposed modification will facilitate bidder to get funding for the project.

The GERC in its orders stated, “Approval is granted for the deviations pertaining to Clause 7.4.1 (b) ‘Payment Security Fund’, Clause 7.8 ‘Change in Law’ and removal of word “Willful” from Clause 9.1 pertaining to bid responsiveness, from the guidelines issued by the Ministry of Power.”

Recently, GERC had also issued an order stating that it will support the implementation of Suryashakti Kisan Yojna (SKY) as a pilot project in Gujarat. In October 2018, GERC issued an order stating that an additional surcharge of ₹0.44 (~$0.0060)/kWh will be applicable in case of open access consumers who avail power through open access from any source other than their respective distribution companies (DISCOMs) and for open access transactions from October 1, 2018, to March 31, 2019.