CERC Rejects Petition Seeking Return Of Bank Guarantee For 100 MW Solar Project Transition Under GNA Rules

The Central Electricity Regulatory Commission (CERC) recently issued an order in the petition filed by ReNew Surya Vihaan Private Limited. The case involved a request from the petitioner seeking relief under Regulation 42 of the CERC’s Connectivity and General Network Access (GNA) Regulations, 2022. ReNew Surya Vihaan was developing a 100 MW solar power project in Rajasthan. They had signed a Power Purchase Agreement (PPA) with SECI in April 2022 for the sale of power from the project.

The dispute arose over the treatment of a Construction Bank Guarantee (CBG) amounting to ₹5 crores. This guarantee had been submitted by the petitioner under the earlier Connectivity Regulations, 2009, as a condition for securing Long-Term Access (LTA) to the inter-state transmission system. After the new GNA Regulations came into effect, the petitioner transitioned their project’s connectivity and LTA in line with the new regulations.

Under the GNA Regulations, entities that had been granted LTA but had not yet become effective were given two options: either convert the LTA to GNA or surrender it. ReNew Surya Vihaan chose to convert its LTA to GNA. According to the regulations, any previously submitted Construction Bank Guarantee would be treated as Conn-BG1 for ₹50 lakhs, and the remaining amount would be adjusted as Conn-BG2. The petitioner argued that this treatment was unfair because, as a fresh applicant under the new GNA rules, they would have only been required to submit a Conn-BG1 of ₹50 lakhs and Conn-BG3 at ₹2 lakhs per MW, totaling ₹2.5 crores. However, since they had already submitted ₹5 crores as a CBG under the old regulations, they believed they were being asked to provide double the required financial security without justification.

ReNew Surya Vihaan requested CERC to use its powers to “remove difficulty” under Regulation 42 and direct CTUIL, the Central Transmission Utility of India Limited, to return the excess guarantee amount. They offered to submit the appropriate bank guarantees as per the new regulations instead.

CTUIL, on the other hand, argued that their actions were fully compliant with the GNA Regulations, 2022. They maintained that they had simply followed the provisions of Regulation 37.3(3)(d), which stipulated how the existing bank guarantees should be treated during the transition period. CTUIL further noted that the petitioner voluntarily chose to transition under these regulations and was aware of the applicable rules.

After reviewing the submissions, CERC found no merit in the petitioner’s argument. The Commission stated that the regulations had been applied correctly and fairly by CTUIL. They explained that the petitioner’s comparison to fresh applicants was not valid, as fresh applicants might have different requirements based on the capital costs of their associated transmission systems. Additionally, the petitioner’s argument of facing a disproportionate financial burden was dismissed as speculative.

CERC declined to exercise its power under Regulation 42 to remove difficulty in this case. The Commission ruled that the actions of CTUIL were consistent with the GNA Regulations, 2022, and rejected ReNew Surya Vihaan’s request for the return of their construction bank guarantee. The petition was dismissed.