APTEL restores the tariff of Rs 8.40 / unit for a solar developer in Karnataka

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Strong points :

  • While the consistency of these orders is welcome, the delay and obvious waste of time caused by what should be obvious decisions is not good.
  • State regulators need to tighten their reasoning as well as their due diligence on orders, given the multitude of canceled orders in recent months.

In a case involving a solar energy developer, Vatsala Bellary Solar Projects Private Limited v Karnataka Electricity Regulatory Commission (KERC) and Bangalore Electricity Supply Company Limited (BESCOM), the Electricity Appeals Tribunal (APTEL) ruled to restore the initial tariff of Rs 8.40 / unit on the revised tariff of Rs 4.36 / unit that KERC had imposed on the developer.

The key question APTEL decided on was whether the project was qualified to tolerate the delay in starting planned operations, which was attributed to the time taken by government agencies to authorize the land conversion. In this regard, APTEL referred to previous orders as well as a judgment of the Supreme Court, which had ruled in favor of developers placed in the same way in the state. Even a three-member state committee tasked with investigating the problem, common to many small developers, had found merit in the argument of delays caused by government departments involved.

As a result, the committee had recommended authorizing the discom (Bescom in this case) to allow a six-month extension to such cases on a case-by-case basis. However, the KERC, in a subsequent general decree, had decided to assume the right to such extensions only after its approval.

This led to a stinging situation in this case where the developer, even after receiving a letter from BESCOM authorizing a six-month extension, and thus meeting his new deadline for starting business operations, faced the prospect of go through KERC thereafter. The KERC, in its wisdom, decided to impose damages and reduced the price of the project to Rs 4.36 / unit for the delay.

The APTEL ordinance here referred to its own previous ordinances as well as the SC ordinance, reminding all concerned that in similar cases previously, it had already made negative comments against KERC for taking such a position.

So, he reinstated the tariff orders and also asked BESCOM to clear the arrears owed to the solar developer from the start date, as the discom was paying at the lowest rate so far.

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