GERC Probes Dispute Over 190 MW Solar Power Generation Shortfall In Gujarat

Juniper Green Three Private Limited filed a petition before the Gujarat Electricity Regulatory Commission under Section 86(1)(f) of the Electricity Act, 2003, citing a dispute over a unilateral deduction of ₹31,23,372 by Gujarat Urja Vikas Nigam Limited (GUVNL). The deduction was made from the company’s invoice dated 17 May 2022 for solar power supplied in March and April 2022. Juniper operates a 190 MW solar photovoltaic project in Gujarat, with two units commissioned on 19 March 2022 (40 MW) and 24 March 2022 (150 MW), supplying power to GUVNL under a Power Purchase Agreement (PPA) dated 8 July 2020 and a supplementary PPA dated 25 April 2022.

Juniper argued that the deduction was made without prior notice or written justification as required under Article 6.6 of the PPA, which obligates GUVNL to pay 85% of any disputed amount by the due date. The company maintained that the alleged shortfall in generation for the eight days from 24 March to 31 March 2022 was beyond its control and that the Capacity Utilization Factor (CUF) should be calculated annually, not pro-rated for a partial year. They also cited industry norms, force majeure conditions, and initial stabilization issues common to solar plants as reasons why initial generation might be lower.

The petitioner claimed that GUVNL did not provide evidence of loss due to the shortfall, making the deduction arbitrary and contrary to the PPA and natural justice principles. They cited multiple judicial precedents to support their interpretation that CUF must be assessed annually and that deductions for partial-year shortfall were invalid.

In its reply, GUVNL contended that the PPA and bidding documents define the “initial contract year” as starting from the commercial operation date (COD) and ending on 31 March of that fiscal year. For the period 24 March to 31 March 2022, Juniper achieved a CUF of 9.67%, well below the contracted CUF of 26.70% and the permissible lower limit of 22.70%. Based on Article 3.1(iv)(b) of the PPA, GUVNL calculated a shortfall of 47,50,376 kWh and applied compensation at 25% of the PPA tariff, amounting to ₹31,23,372, which they deducted from Juniper’s invoice. GUVNL maintained that this calculation was valid under the PPA and Ministry of Power guidelines, and that no force majeure notice was issued by Juniper.

GUVNL further argued that the compensation clause constitutes liquidated damages agreed upon in the contract, which do not require proof of actual loss. They cited legal precedents to assert that such pre-estimated damages are enforceable without demonstrating monetary injury, especially in regulated sectors like electricity, where actual loss quantification is complex.

The matter thus revolves around the interpretation of the PPA’s CUF provisions for the initial contract year, the validity of pro-rata shortfall calculations, and whether GUVNL followed due contractual procedure before making the deduction.