APERC Rejects Petition For RPPO Relief And Cap On Obligations, Upholds Strict Compliance With Renewable Energy Regulations

A petition was filed by Sarda Metals & Alloys Ltd., a company engaged in the manufacturing and export of manganese-based Ferro Alloys, seeking relief related to their Renewable Power Purchase Obligation (RPPO) from the Andhra Pradesh Electricity Regulatory Commission (APERC). The company operates a captive power plant (CPP) in Andhra Pradesh, and they argued that due to financial distress and other challenges, they were unable to meet their RPPO from the fiscal years 2017-18 to 2022-23. They requested the Commission to carry forward their RPPO to the fiscal years 2024-25 to 2029-30.

Sarda Metals & Alloys Ltd. explained that their CPP was synchronized in 2013, and they had been supplying power through Open Access to Andhra Pradesh DISCOMs and other consumers. They stated that during the years from 2012-13 to 2019-20, they faced severe financial difficulties, making it impossible for them to incur the additional expenditure required for purchasing Renewable Energy Certificates (RECs), which are necessary to fulfill the RPPO.

The petitioner highlighted that the prices of RECs during the years they failed to meet their obligations were significantly higher, adding to their financial strain. Furthermore, they mentioned that trading in RECs was stayed due to judicial orders during the fiscal years 2020-21 to 2022-23. Sarda Metals & Alloys Ltd. argued that their failure to fulfill the RPPO was unintentional and beyond their control, requesting the Commission to allow them to carry forward their obligations without financial penalties.

Additionally, the company sought to have their RPPO liability capped at the levels prescribed by the Ministry of Power’s clarifications issued in 2019, which suggested that Captive Power Plants (CPPs) commissioned before April 2016 should have their RPPO capped at the levels applicable in the fiscal year 2015-16.

The Andhra Pradesh Electricity Regulatory Commission considered the arguments presented by both the petitioner and the respondent, Transmission Corporation of Andhra Pradesh Limited (APSLDC). APSLDC argued that the regulations set by APERC were clear and binding, and the RPPO must be fulfilled as per the percentages specified for each year. They stated that financial distress could not be a valid reason for postponing or reducing the RPPO obligations, and that the petitioner’s request would undermine the purpose of the regulations.

After careful deliberation, the Commission decided against the petitioner on both points. The Commission held that the petitioner’s request to carry forward their RPPO for the years 2017-18 to 2022-23 to the corresponding years from 2024-25 to 2029-30 was not sustainable. The Commission emphasized the importance of adhering to RPPO as part of the country’s efforts to promote renewable energy and protect the environment. It was concluded that non-compliance with RPPO could not be excused, as it directly impacts the reduction of greenhouse gas emissions.

Moreover, the Commission rejected the petitioner’s request to cap their RPPO liability as per the Ministry of Power’s clarifications. The Commission asserted that while these clarifications might be considered in future regulations, they could not override the existing regulations that were already in force.

The Commission dismissed the petition, reinforcing the need for strict compliance with RPPO regulations and underlining the broader environmental objectives that these regulations serve. The decision reflects the Commission’s commitment to promoting renewable energy and ensuring that obligated entities meet their responsibilities in this regard.