CERC Directs MPPMCL & DMRC To Pay Compensation To Solar Developer


The Madhya Pradesh Power Management Company (MPPMCL) and Delhi Metro Rail Corporation (DMRC) has been ordered by the Central Electricity Regulatory Commission (CERC) to resolve the safeguard duty claims and pay the delayed payments surcharge within 30 days after the CERC ruled in favor of a solar developer.


In a petition, ACME Jaipur Solar Power requested the Commission to instruct MPPMCL and DMRC to pay the late payment and tariff in a timely and complete manner, complying with the Commission’s earlier ruling.


Rewa Ultra Mega Solar (RUMSL) issued a request for proposals in March 2013 for the construction of three 250 MW solar projects totaling 750 MW, in which ACME Solar Holding was the winning bidder to build one of the units.


To carry out the project, ACME Solar created a special-purpose vehicle in 2017 called ACME Jaipur Solar Power and signed two different power purchase agreements (PPAs) with MPPMCL and DMRC.


On the import of solar cells, the government implemented the safeguard tariff in July 2018. At that time, the effective rate of duty was 25%.

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In 2019, ACME filed a petition requesting compensation for the inflated costs spent as a result of the application of the safeguard duty on the grounds of a “Change in Law” event.

ACME explained that it has incurred additional costs under “Change in Law” of Rs. 297.6 million for the purpose of paying for the Customs bonds to import goods.

The Commission determined that the enactment of the safeguard duty fell under the PPA’s “Change in Law” clause, and asked the developer to give the respondents access to any pertinent records showing a direct link between the projects and the importation of goods.

DMRC made it clear during the hearing that it was already paying the petitioner on a regular basis and that MPPMCL was the only party not complying with the order.

Because there was no link between the claim and the supporting papers, MPPMCL confirmed that the sum of Rs. 297.6 million could not be resolved.

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The petitioner has so disobeyed the Commission’s earlier order’s directive, and the reason it was unable to make the payments was that the petitioner was unable to provide the requested documentation.

The Commission noted that the developer has paid the Customs officials a total of Rs. 297.6 million. Further, in light of the prior ruling issued by the Commission and the fact that there was an actual cash flow of Rs. 297.6 million, MPPMCL was obligated to compensate the developer for these sums.

Thus, the Commission instructed MPPMCL and DMRC to conduct the claim’s reconciliation along with late payment charges in accordance with the PPA.

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