Wheeling & Banking Agreement Mandatory to Receive Compensation for Solar Power Supplied
KERC was responding to a petition filed by Amplus Power Solutions regarding a solar power project
June 7, 2019
The Karnataka Electricity Regulatory Commission (KERC) has ruled against providing any relief to Amplus Power Solutions, the developer of a 34.3 MW solar power project in a solar park located in Varavukaval village in a case regarding the payment for energy supplied before a wheeling and Banking agreement was in place. Sagitaur Ventures India executed the project.
Amplus had petitioned the KERC to direct the respondents to pay for the energy it had injected into the grid from April 18, 2017, to May 31, 2017, which is the period before the execution of the Wheeling and Banking Agreement on June 1, 2017.
Amplus Power Solutions had filed a petition against the state load despatch center (SLDC), Bangalore Electricity Supply Company Limited (BESCOM), Chamundeshwari Electricity Supply Corporation Limited (CESCOM), and the Karnataka Power Transmission Corporation Limited (KPTCL).
Amplus had asked for compensation based on the average power purchase cost (APPC) rate prevailing in FY 2017-18, with interest at the rate of 12% per annum.
The KERC in its order considered the amended open access regulations 2015 to determine whether Amplus is eligible for the compensation. It also relied on the recent orders of the Appellate Tribunal of Electricity in passing its final verdict.
The KERC noted in its order that contrary to the claims being made by Amplus in its petition, the developer did not file the required wheeling and banking agreements with each licensee, as is mandated under regulations. It ruled that the developer’s open access grant, therefore, became invalid and that it is not entitled to any compensation for the electricity injected into the grid before signing of the Wheeling and Banking Agreement.
Amplus had applied to SLDC for the grant of open access, and in the first phase, only 8 MW was granted access for projects commissioned on March 31, 2017. In the second tranche, another 8 MW was granted open access on May 13, 2017. The total installed capacity of 34.3 MW was connected to the grid only on August 11, 2017.
Though the energy injected into the grid between April 18, 2017, to May 31, 2017, was not considered, the energy injected into the grid on and from June 1, 2017, was considered by the commission as the agreement was executed on June 1, 2017.
A couple of months ago, Karnataka, India’s top state in terms of installed solar capacity, was mulling whether to stop the tender and auction process for large-scale ground-mounted projects as power generation exceeded demand in the state. To this effect, the Karnataka Electricity Regulatory Commission (KERC) had written to the Karnataka Renewable Energy Development Limited (KREDL) regarding the procurement of solar power.
In March 2019, the Karnataka High Court issued a significant ruling in which it quashed an order issued by the KERC relating to an increase in wheeling charges for open access power consumers in the state. The Karnataka High Court order brought relief to all renewable energy generators trading power through open access in Karnataka. The court, in its order, reiterated the principle of settled contracts which lent certainty to power purchase agreements and instilled confidence in investors.
In May 2018, KERC had issued an order setting the wheeling, transmission charges to be levied on renewable energy projects in the state. The order has been in effect since April 1, 2018, and will be in effect till March 31, 2020.
Soumik is a staff reporter at Mercom India. Prior to joining Mercom, Soumik was a correspondent for UNI, New Delhi covering the Northeast region for seven years. He has also worked as an Asia Correspondent for Washington DC-based Hundred Reporters. He has contributed as a freelancer to several national and international digital publications with a focus on data-based investigative stories on environmental corruption, hydro power projects, energy transition and the circular economy. Soumik is an Economics graduate from Scottish Church College, Calcutta University.