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KERC Directs GESCOM To Pay Tariff of Rs 8.40/kWh To Solar Developer


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The Karnataka Electricity Regulatory Commission (KERC) recently determined that a solar developer, Aurad Solar, was entitled to a rate of Rs 8.40/kWh from the Gulbarga Electricity Supply Company (GESCOM) beginning on the date the project was commissioned.

The Commission ordered GESCOM to pay the developer the differential pricing for the electricity delivered beginning from the project’s commissioning within 3 months. If the distribution business (DISCOM) fails to do so, it must pay a default interest rate of 9% per year until the payment date.

It further said that the developer was not obligated to pay any liquidated damages for the project’s delay in commissioning. If any damages are collected, they must be repaid to the developer, which is to be engaged with DISCOM in a fresh supplement power purchase agreement (SPPA) within 30 days of the order’s issuance.

Earlier, Aurad Solar was selected to construct 3 MW in the bids announced by Karnataka Renewable Energy Development Limited (KREDL) for developing solar projects and inked a PPA with GESCOM on September 7, 2015, at a tariff of Rs 8.40/kWh.

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The project was commissioned on February 28, 2017, three months beyond its original completion date.

According to the developer’s filings, the delay in attaining commercial functioning of the project was caused by ‘force majeure’ circumstances. As a result, it was not accountable for any lower tariff or payment of liquidated damages as a result of the delay in starting the power supply.

Later, on May 29, 2017, the developer commissioned the project, and on March 16, 2017, the parties signed the SPPA and submitted it to the Commission for clearance.

The GESCOM said that there was no need for the developer to wait for the state Commission’s acceptance of the SPPA before applying for land conversion, its contention that the delay in obtaining approval for land conversion was beyond its control was not warranted, and therefore, the developer was paid a tariff of Rs 4.36/kWh.

Later, Aurad Solar had petitioned the Commission for a time extension based on ‘force majeure’ occurrences, as well as approval of the amended SPPA. It has also asked the Commission to order GESCOM to purchase power at Rs 8.40/kWh in accordance with the terms of the PPA.

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The Commission determined that the project, along with the Santhpur substation, was ready for commissioning. The next step in the synchronization process was to get interconnection permission and to commission the project with the grid.

The Commission recognized that there was a significant delay in the issue of the land conversion order, which was not the developer’s responsibility, and so the developer was not accountable for the project’s lag in commissioning.

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