A recent hearing before the Haryana Electricity Regulatory Commission (HERC) once again brought into focus the dispute between M/s L R Energy Pvt. Ltd. and the Haryana Power Purchase Centre (HPPC). The matter, filed under HERC/Petition No. 22 of 2025, had been sent back to the Commission by the Appellate Tribunal for Electricity (APTEL) for fresh evaluation. The key issues to be reviewed were the project-specific tariff of a 20 MWp solar power project located at Tosham in Haryana, particularly the assessment of capital costs and the plant’s Capacity Utilization Factor (CUF).
L R Energy strongly contested the earlier decision of the HERC that had lowered the capital cost of the project. The company argued that the figure it had initially submitted, amounting to ₹90.448 crores, was a more accurate estimate of its actual expenditure. To support its claim, the company highlighted that the Indian Renewable Energy Development Agency (IREDA), a government financing body, had conducted an independent review and approved a capital cost of ₹83.50 crores. This, L R Energy pointed out, was significantly higher than the ₹71.48 crores approved by the Commission.
The company further argued that comparing its costs with those of much larger solar developers like Amplus Solar and Greenyana Solar was not appropriate. According to L R Energy, companies of their size do not enjoy the benefits of economies of scale. Larger developers can negotiate lower prices due to bulk purchasing and stronger bargaining power, while smaller developers like them face higher procurement costs. The company also placed on record various documents, including invoices and certificates, to substantiate its capital expenditure claims.
On the issue of CUF, L R Energy provided detailed data covering its operational performance from 2021 to 2025. The monthly and annual figures showed that while there were fluctuations in generation, the overall yearly CUF for the plant ranged between 14% and 18%. This, the company stated, reflected the genuine output performance of the project under the prevailing conditions.
The company also addressed HPPC’s arguments regarding regulatory compliance. HPPC had raised concerns about the procurement process followed by L R Energy, but the company clarified that competitive bidding was not a mandatory requirement under the applicable regulations. It stressed that its work orders and procurement practices were consistent with the legal framework governing renewable energy projects in the state.
The hearing also brought attention to the broader challenges faced by smaller renewable energy developers. L R Energy argued that external market conditions, such as the impact of the COVID-19 pandemic on supply chains and procurement, had further increased costs for companies without the advantage of bulk purchasing. The case highlighted the difficulty in applying uniform benchmarks across projects developed by companies of vastly different sizes.
As the Commission re-examines the project-specific tariff in light of the APTEL judgment, the outcome of this case could play an important role in shaping the approach to determining fair tariffs for renewable energy projects in Haryana. The matter underscores the balance that regulators must strike between ensuring cost efficiency for consumers and providing fair recognition of the financial realities faced by smaller developers.
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