APERC Resolves Financial Dispute Between Solar Companies And Southern Power Distribution Company

On June 19, 2024, a significant decision was made by the Andhra Pradesh Electricity Regulatory Commission (APERC) regarding a dispute involving multiple solar companies and the Southern Power Distribution Company of Andhra Pradesh (SPDCL), among other respondents. The case centered on several financial claims made by the solar companies against SPDCL for various dues related to power supply agreements.

The petitioners in the case included six solar energy companies such as ACME Solar, Aarohi Solar, ACME Jaisalmer Solar, Dayanidhi Solar Power, Niranjan Solar Energy, and Vishwatma Solar Energy, all based in Gurugram, Haryana. These companies collectively sought multiple reliefs from SPDCL. The primary issues revolved around payments withheld by SPDCL due to what it claimed were unilateral deductions for excess Direct Current (DC) capacity installed by the petitioners. The petitioners argued that SPDCL owed them significant amounts, including the principal outstanding amount, reimbursements for deducted amounts from monthly tariff bills, late payment surcharges, and other related payments.

During the hearing, both parties reached a mutual understanding on most of the issues. This understanding led to several undertakings and commitments from both sides. Specifically, the solar companies agreed to remove the additional solar panels that had been installed after the commencement of the projects. In return, SPDCL agreed to a structured payment plan to settle the outstanding amounts.

The agreement included the following key points Payment for additional panels installed before the official commissioning of the projects would be made in six installments, without future claims for surcharges or legal actions. Payment for panels installed after the official commissioning would be made in twelve installments, also without future claims for surcharges or legal actions. The petitioners agreed to withdraw any ongoing legal cases related to these payments, provided the agreed amounts were paid as stipulated.

One notable aspect of the agreement was the petitioners’ acceptance to waive 50% of the late payment surcharges for amounts that were unrelated to the additional panels and were due for payment in the normal course.

The commission noted that all additional panels had been removed by November 2023, in compliance with the notices issued to the petitioners in April 2023, which had given them 30 days to remove the panels.

The final order from the commission directed SPDCL to adhere to the payment plan agreed upon during the proceedings. The commission mandated that the withheld amounts for the panels installed before the projects’ official commissioning, along with 50% of the late payment surcharges, should be paid in six monthly installments. For the additional panels installed after commissioning, payments should be made in twelve installments without any surcharge.

This resolution marked a collaborative effort to settle financial disputes while ensuring compliance with regulatory standards. The APERC’s decision aimed at balancing the financial interests of the solar companies and SPDCL, promoting a fair and structured approach to resolving such disputes in the future.

The order was pronounced by the commission on June 19, 2024, marking a significant step towards resolving long-standing financial disagreements and reinforcing the regulatory framework governing power purchase agreements in Andhra Pradesh.

Please view the document here for more details.