Uttar Pradesh DISCOM Asked to Deposit Over ₹7 Billion In RPO Regulatory Fund

The solar RPO backlog stands at 2,930.33 MUs and non-solar at 4,440.79 MUs


The Uttar Pradesh Regulatory Commission (UPERC) has directed the Uttar Pradesh Power Corporation Limited (UPPCL) to create a separate renewable purchase obligation (RPO) Regulatory Fund. The commission has directed UPPCL to deposit the amount of the respective shortfalls in solar and non-solar purchase obligations until the financial year 2019-20 at the rate of ₹1 (~$0.014)/kWh.

The commission has asked UPPCL to deposit an amount of ₹7.37 billion (~$103.3 million) in four installments, which are to be transferred each month for December 2019, January 2020, February 2020, and March 2020.

The amount deposited will be used to procure respective renewable energy power as per the roadmap provided by UPPCL.

Earlier this year, the state commission had ordered its electricity distribution companies to respond to the suo moto proceedings about meeting RPO targets. The suo moto proceedings were initiated in February 2019.

UPPCL had rectified the deficiencies as highlighted by the Commission and submitted the revised data for the consideration of the Commission. In its submission, UPPCL had noted that it proposes to meet the backlog RPO without any distinction in the periods (2010-11 to 2014-15 and 2015-16 to 2018-19).

The Solar Energy Corporation of India (SECI) recently signed two power sale agreements with UPPCL, one of 750 MW at a tariff rate ₹2.55 (~$0.036)/kWh and another for 200 MW at ₹2.89 (~$0.041)/kWh both for 25 years.

The solar RPO backlog up to 2018-19 stands at 2,930.33 MUs, and for non-solar, it is at 4,440.79 MUs. The UPPCL is expected to meet the entire solar RPO backlog by the end of 2021-22 and non-solar RPO by mid-2021-22.

According to the regulations 7 and 8 of UPERC Regulations, 2010, if the obligated entity doesn’t fulfill its RPO target during any year, it will have to deposit the amount into a separate fund based on the shortfall in units of RPO regulatory charges and forbearance price.

The regulations make it pretty clear that the RPO Regulatory Fund will be utilized for the purchase of renewable energy certificates (RECs) or will be provided to UPNEDA or any other government agency for the development of transmission and distribution infrastructure in the state connected to renewable energy generating stations.

After considering the submissions made by the petitioner, the commission has directed UPPCL to create and maintain the fund as per the procedure developed by the state agency.

Previously, Mercom had reported that the UPERC had accepted the submissions made by Noida Power Company Limited (NPCL) on the fulfillment of past RPO. NPCL’s submissions had come after the UPERC had initiated suo moto proceedings in the matter of RPO targets by the obligated entities.

According to Mercom’s India Solar Project Tracker, Uttar Pradesh has about 970 MW of large-scale solar projects in-operation and 1.6 GW of large-scale solar projects under various stages of development.