Landmark Verdict: Solar Developer Triumphs Over APSPDCL In Regulatory Dispute

In a significant development, a regulatory commission recently concluded a final hearing on a dispute between a solar power developer and a distribution company (DISCOM). The case, which came up for adjudication on October 31, 2023, involved M/s. Maddimadugu Power Private Limited (MPPL), formerly known as M/s. Raajratna Energy Holdings Private Limited, and Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL).

MPPL had filed a petition seeking to quash a letter/notice issued by APSPDCL on March 12, 2020, as well as a Vigilance Enquiry Report dated September 16, 2019. The central issue revolved around APSPDCL’s claim that MPPL had illegally added DC Solar Panels beyond the contracted capacity at its solar power plant. MPPL contested these allegations, arguing that it had not violated any terms of the Power Purchase Agreement (PPA) and sought the release of outstanding dues totaling ₹7,55,21,135/-.

The petitioner’s case traced back to 2014 when APSPDCL issued a proposal for setting up a 5 MW solar power project, eventually awarded to MPPL through a competitive bidding process. MPPL, as the successful bidder, entered into a long-term PPA with APSPDCL for 25 years. The dispute arose when APSPDCL claimed that MPPL had installed additional DC Solar Panels, leading to the withholding of payments.

The regulatory commission, after careful consideration of the evidence and legal arguments, delivered a comprehensive verdict. It emphasized key definitions and clauses in the PPA, particularly distinguishing between AC capacity and DC capacity. The commission found that MPPL had not violated the PPA’s terms as it had not added extra DC panels after the project’s commissioning.

The commission also highlighted the absence of specific clauses in the PPA restricting the total installed capacity of DC panels. It ruled that APSPDCL’s unilateral withholding of payments without invoking termination clauses in the PPA was unauthorized and not sustainable.

In conclusion, the commission directed APSPDCL to release the withheld amounts to MPPL and pay interest as per the PPA’s provisions. The verdict sets a precedent, clarifying the rights and obligations of solar power developers and distribution companies, and emphasizing the sanctity of PPAs in governing their relationships.

This regulatory decision is expected to have broader implications for the renewable energy sector, providing clarity on contractual terms and dispute resolution mechanisms. It reinforces the importance of adherence to contractual obligations and the need for transparent and lawful actions by both parties involved in power purchase agreements.

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