GERC Orders Return Of Bank Guarantee In 200 MW Wind-Solar Hybrid Project Connectivity Dispute In Gujarat

The Gujarat Electricity Regulatory Commission (GERC) has directed the Gujarat Energy Transmission Corporation Limited (GETCO) to return a bank guarantee worth ₹6 crore to Morjar Renewables Private Limited within 30 days. The order came in a dispute concerning GETCO’s decision to revoke the developer’s Stage-II connectivity for a 200 MW wind-solar hybrid power project and its subsequent threat to invoke the bank guarantee.

The dispute relates to Morjar Renewables’ application for Stage-I and Stage-II connectivity for its proposed 200 MW wind-solar hybrid project at the 220 kV Kalawad Substation in Gujarat. As part of the Stage-II connectivity process, the company submitted a bank guarantee of ₹6 crore. GETCO initially approved the connectivity application and executed a connection agreement with the developer in mid-2023.

However, GETCO later revoked the Stage-II connectivity, stating that Morjar Renewables had submitted notarised lease agreements instead of registered lease deeds, as required under the applicable detailed procedure. Following the cancellation, GETCO issued a letter threatening to encash the ₹6 crore bank guarantee.

Challenging the decision, Morjar Renewables approached GERC, arguing that GETCO did not have the regulatory authority to invoke or retain the bank guarantee under the circumstances. The developer stated that the bank guarantee could only be encashed in situations specifically covered by the applicable procedure and that connectivity cancellation alone did not provide sufficient grounds for its invocation.

The company also informed the Commission that it had subsequently submitted a fresh connectivity application for the project along with a new bank guarantee of ₹12.5 crore. According to the developer, this arrangement adequately protected GETCO’s financial interests and removed any justification for retaining the earlier guarantee.

GETCO opposed the petition, alleging that Morjar Renewables had obtained the original connectivity approval through misrepresentation by submitting incorrect land documents and falsely declaring compliance with eligibility requirements. The transmission utility argued that allowing such practices without financial consequences could weaken regulatory discipline and affect the proper allocation of transmission capacity.

After examining the submissions and relevant provisions, GERC ruled in favour of Morjar Renewables. The Commission observed that the detailed procedure identifies specific circumstances for invoking bank guarantees, mainly involving failure to construct dedicated transmission infrastructure within the prescribed timelines. It found that these conditions were not applicable in the present case.

GERC also noted that GETCO was responsible for examining the documents submitted during the initial application process and should have identified any discrepancies before granting connectivity approval.

Accordingly, the Commission set aside GETCO’s letter threatening bank guarantee encashment and directed it to return the ₹6 crore guarantee to Morjar Renewables within 30 days. However, GERC rejected the developer’s request for reimbursement of bank guarantee maintenance costs due to insufficient documentary evidence.