Challenges Faced By Farmers In Accessing Compensation For Solar Power Projects: A Closer Look At The PM KUSUM Scheme

A petition has been filed by M/s Kisan Urja Hitkari Samiti, representing farmers who are Renewable Power Generators (RPGs), regarding compensation for carrying costs in the implementation of Solar Power Projects under the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) Scheme, Component-A, in Rajasthan.

The petition, filed under the PM KUSUM Scheme, seeks compensation for RPGs who have faced financial challenges due to the COVID-19 pandemic. Despite being promised a 14% return on equity, RPGs have encountered difficulties in securing financial assistance from banks, primarily due to low tariff rates specified in the Power Purchase Agreements (PPAs).

While the Ministry of New and Renewable Energy (MNRE) extended the deadline for project completion due to pandemic-related financing challenges, RPGs still face hurdles in accessing financial support. Many RPGs have approached financial institutions for assistance, only to find that the tariff rates specified in the PPAs are not financially viable.

In response to the petition, the Rajasthan Renewable Energy Corporation Ltd (RRECL), acting on behalf of the government, has argued that the petition lacks sufficient evidence to support the claims made by the RPGs. They assert that RPGs must first establish the impact of the Change in Law event on their costs through supplementary bills, as per the terms of the PPAs.

The Rajasthan Electricity Regulatory Commission (RERC) has dismissed the petition, stating that the Kisan Urja Hitkari Samiti does not have the legal standing to seek relief on behalf of RPGs. Instead, individual RPGs are instructed to raise their claims through supplementary bills, which will be evaluated on a case-by-case basis by the respective Discoms.

According to the RERC’s directive, RPGs must submit supplementary bills detailing their financial losses due to the Change in Law events approved by the Commission. Discoms will then verify these claims and provide compensation accordingly. If RPGs are dissatisfied with the Discoms’ response, they may seek redress directly from the Commission.

The petition filed by the Kisan Urja Hitkari Samiti highlights the challenges faced by RPGs in accessing financial assistance for Solar Power Projects under the PM KUSUM Scheme. While the RERC has dismissed the petition, RPGs are encouraged to pursue their claims individually through supplementary bills and seek redress if necessary.

Please view the document below for more details.