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KERC Restores Original PPA Rate 8.40 INR/Kwh For M/S Chowdeshwari Solar Energy

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In a recent petition, Karnataka Energy Regulatory Commission (KERC) restores original Power Purchase Agreement (PPA) rate of a solar power developer with refund of Liquidated Damage (LD) charges.

As per the guideline issued vide notification no. ENVSC 2014, Bangalore, dated 26.08.2014, ‘Govt of Karnataka’ invited application from eligible land owners for awarding 1-3MW capacity solar power plant. Accordingly, the petitioner, smt.s kharada a land owner applied for 1MW capacity of solar power plant in her land in chikkaballapura district and received Letter of Award (LOA) from Karnataka Renewable Energy Development Ltd (KREDL) dated 17.03.2015. On 03.07.2015, smt.s.kharada executed a PPA with Bangalore Electricity Supply Company Ltd (BESCOM) at tariff rate of 8.40INR/Kwh. Henceforth, original allottee appointed M/S Chowdeshwari Solar Energy Pvt Ltd as Special Purpose Vehicle (SPV) in which she kept 26% share. According to PPA, the developer supposed to commission the whole project in 18 months time from the date of signing. Due to several unavoidable circumstances some approval processes for starting the project delayed. For these delay, commissioning date (COD) could not be achieved by the developer. Subsequently BESCOM reduce the tariff rate at 4.36INR/Kwh with proportionate LD received from the developer.

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Following this incident, the developer first filed a petition to Karnataka Energy Regulatory Commission (KERC) for reinstatement of original tariff and refund of LD charges on force majeure ground. After analyzing all inputs received from petitioner and respondents, commission stayed reduced tariff rate with LD charges. Aggrieved by this verdict petitioner approached Hon’ble High Court of Karnataka in writ petition challenging the order of commission. After analyzing all prayers, high court remitted back the matters to the hand of the commission for appropriate resolution of the dispute.

In writ petition, developer submitted the details of delayed approval as below.

M/S Chowdeshwari Solar Energy Pvt Ltd

ParticularsApplied/Target dateReceived dateDelays (in days)
PPA delivery03.07.1528.08.1556 days
Extension approval09.12.1603.02.1756 days
Land conversion order11.05.1630.11.16203 days
Power evacuation order04.07.1613.10.16101 days
Substation work order04.07.1620.12.16169 days
Railway approval20.06.1615.11.17360 days

Petitioner also claimed 3 months delay in commissioning due to demonetization during Nov 2016.

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The respondents for this petition are

a. Bangalore Electricity Supply Company Ltd (BESCOM)

b. Karnataka Power Transmission Corporation Ltd (KPTCL)

c. Karnataka Renewable Energy Development Ltd (KREDL)

d. The Deputy Commissioner (DC)

After analyzing all prayers and counter prayers by respondents, commission concluded its verdict as follows

i. The delay in commissioning is condoned unto 22.06.2017 and the petitioner is entitled to tariff of 8.40 INR/Kwh as per PPA.

ii. The BESCOM is directed to pay the difference of the tariff paid per unit from the date of commissioning of the plant along with late payment surcharge (LPS) in terms of PPA within 2 months.

iii. BESCOM is directed not to levy any LD & if already levied the same should be refunded to the petitioner in 2 months.

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