SECI Prevails In Wind And Solar Dispute As PSPCL Ordered To Settle Outstanding Payments

Solar Energy Corporation of India Limited (SECI) has filed a petition seeking resolution against a respondent  (Punjab State Power Corporation Limited (PSPCL)) for non-payment of outstanding amounts and late payment surcharges for renewable power supplied between April 1, 2020, and April 7, 2020. The power sale agreements in question were executed in 2015, 2017, and 2018.

SECI, designated as the nodal agency for central government schemes in grid-connected wind and solar power, emphasized the inter-state nature of the transactions. The power is supplied from solar projects in Rajasthan and wind projects in Gujarat for consumption in Punjab. SECI argues that disputes under these agreements should be addressed collectively.

PSPCL (Punjab State Power Corporation Limited), the respondent, contends that the petition lacks jurisdiction, citing approval from the Punjab State Electricity Regulatory Commission (PSERC) for power sale agreements. PSPCL further claims the petition suffers from undue delay and should be dismissed.

The dispute centers around SECI’s claim for outstanding amounts and late payment surcharges. SECI argues that PSPCL has no valid grounds to withhold payments, challenging PSPCL’s force majeure claim related to the COVID-19 pandemic. The PSERC has already rejected a similar claim by PSPCL, directing them to make payments for the power utilized during the specified period.

SECI points out that solar and wind projects have a ‘Must Run’ status, and PSPCL’s obligation to pay for the scheduled power cannot be excused due to force majeure. SECI seeks payments for both wind and solar power supplied during the disputed period.

PSPCL, however, maintains that it was excused from purchasing the entire power due to the force majeure event, leading to a decline in electricity demand during the lockdown. They argue against SECI’s reliance on ‘Must Run’ status, claiming it is impermissible.

The regulatory commission’s observation is crucial. It recognizes the ‘composite scheme’ nature of the projects, asserting jurisdiction based on the inter-state aspect of the transactions. The commission rules in favor of SECI, directing PSPCL to pay for the supplied energy from both wind and solar projects during the specified period, along with late payment surcharges.

Despite PSPCL’s force majeure notice, the commission emphasizes that scheduling power implies consent, and PSPCL cannot avoid payment. This decision aligns with PSERC’s earlier directive. The commission concludes by acknowledging SECI’s computation of outstanding amounts and late payment surcharges, directing PSPCL to fulfill these payments as stipulated in the relevant power sale agreements. The dispute resolution is in line with the regulatory framework, emphasizing the importance of honoring contractual obligations in the renewable energy sector.

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