GERC Approves Settlement For 2 MW Solar Captive Power Project Dispute In Gujarat

In a recent decision dated February 2, 2026, the Gujarat Electricity Regulatory Commission (GERC) addressed a dispute between M/s Ultra Denim Limited and Dakshin Gujarat Vij Company Limited (DGVCL) concerning a 2 MW solar captive power project. The project, operated by Ultra Denim, had been feeding electricity into the grid since July 18, 2024, despite not having a formal wheeling agreement or a commissioning certificate. The absence of these approvals led the company to approach GERC for resolution.

Ultra Denim, an MSME consumer, sought several directions from the Commission. The company requested that the Commission recognize the solar plant as ready for commissioning from July 2024 and direct DGVCL to execute a wheeling agreement. Additionally, the company sought compensation or set-off for approximately 3.77 million units of energy that had already been injected into the grid during the delay.

The dispute moved forward after GERC issued a directive on November 4, 2025, encouraging both parties to attempt an amicable resolution. Following this, a joint meeting was held on November 28, 2025, at DGVCL’s corporate office. During the discussions, both parties reached a preliminary agreement. They decided that a wheeling agreement would be executed with prospective effect from the date of signing, and in return, Ultra Denim agreed to withdraw its legal proceedings.

However, during the hearing on January 8, 2026, it was noted that the agreement had not yet been formally signed. DGVCL explained that they were awaiting a formal order from the Commission allowing the withdrawal of the petition before completing the documentation. Meanwhile, the Gujarat Energy Development Agency (GEDA) clarified that it could issue a commissioning certificate only after the signed wheeling agreement and other necessary permissions were submitted.

Recognizing the settlement, GERC, led by Chairman Pankaj Joshi and Member Hiren Shah, allowed the unconditional withdrawal of the petition and the related interim application. To ensure the settlement was implemented without delay, the Commission directed DGVCL to sign the wheeling agreement within three days of the order. Once the agreement is executed, Ultra Denim is authorized to approach GEDA for the commissioning certificate, which will be issued according to the law. Both parties are also required to submit a copy of the final agreement to the Commission on affidavit, ensuring that the resolution is officially documented.

This ruling highlights GERC’s efforts to facilitate practical solutions for renewable energy projects, balancing regulatory compliance with the need for prompt implementation of clean energy initiatives. The settlement also ensures that MSME consumers like Ultra Denim can formalize their solar projects and receive due recognition for the energy supplied to the grid.