Petition for Adoption of usage charges for a 1000 MW Solar PV power station (Tranche-III) connected to the ISTS scheme phase-II by the Central Government – EQ

Summary:

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#### 1. Core Business Matter

– **Prayer:** Adoption of **usage charges** for a **1000 MW Solar PV Power Station** (Tranche-III) under the **CPSU Scheme Phase-II** (Government Producer Scheme) via competitive bidding.
– **Bidding Authority:** IREDA (replaced SECI per MNRE OM dated 13.04.2020)
– **Legal Basis:** Section 63 of the Electricity Act, 2003 (tariff adoption through transparent bidding process)

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#### 2. Key Timelines & Bid Process

| Milestone | Date |
|———–|——|
| RfS issued by IREDA | 29 January 2021 |
| Corrigendum to RfS (revised usage charge & VGF) | 14 May 2021 |
| Last date for bid submission | 31 August 2021 |
| e-Reverse Auction | 23 September 2021 |
| Letter of Award (LoA) to SJVN Ltd. | 4 October 2021 |
| LoA acceptance by SJVN | 7 October 2021 |

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#### 3. Bid Results & Allocation (Tranche-III)

| Rank | Bidder | Quoted VGF (₹/MW) | Capacity Allocated (MW) |
|——|——–|——————-|————————|
| L1 | **SJVN Ltd.** | **44,72,000** | **1,000** |
| L2 | NLC India Ltd. | 44,74,990 | 510 |
| L3 | NHPC Ltd. | 44,90,000 | 1,000 |
| L4 | IRCON International Ltd. | 44,94,000 | 500 |
| L5 | NTPC Ltd. | 44,95,000 | 1,990 |
| **Total** | | | **5,000** |

> **Note:** Maximum permissible VGF was reduced from ₹0.70 Cr/MW to **₹0.55 Cr/MW** (₹55 lakhs/MW) vide corrigendum dated 14.05.2021.

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#### 4. Usage Charges Evolution

| Event | Usage Charge (₹/kWh) | Remarks |
|——-|———————|———|
| Original RfS (29.01.2021) | Not to exceed ₹3.50 | Per CPSU Scheme 2019 |
| Corrigendum (14.05.2021) | **₹2.45** (ceiling) | Reduced by MNRE |
| Post-GST increase (16.09.2022) | **₹2.57** (revised ceiling) | Due to GST hike from 5% to 12% on solar devices |

**GST Change Details:**
– Ministry of Finance Notification No. 8/2021 dated 30.09.2021
– GST on renewable energy devices increased from **5% to 12%**
– MNRE communicated revised ceiling of ₹2.57/kWh to IREDA on 16.09.2022
– IREDA informed all parties on 07.10.2022

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#### 5. Power Usage Agreements (PUAs) Executed by SGEL

| Procurer (Respondent) | Capacity (MW) | PUA Date | Usage Charge (₹/kWh) | Regulatory Approval |
|———————-|—————|———-|———————|———————|
| Uttarakhand Power Corp. Ltd. (UPCL) | 200 | 03.01.2024 | 2.57 | – |
| J&K Power Corp. Ltd. (JKPCL) | 300 | 23.02.2024 | 2.57 | – |
| Rajasthan Urja Vikas & IT Services Ltd. (RUVITL) | 500 | 10.03.2024 | 2.57 | RERC order dated 24.07.2024 |
| **Total** | **1,000** | | | |

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#### 6. APTEL’s Analysis & Decision

**Key Observations:**

| Issue | APTEL Finding |
|——-|—————|
| **Bidding process** | Transparent, competitive, VGF-based e-reverse auction – compliant with Section 63. |
| **Reference date for parameters** | **Date of bidding (23.09.2021)** – parameters cannot be altered post-bidding. |
| **Adopted usage charge** | **₹2.45/kWh** (not ₹2.57/kWh) – because that was the ceiling at bid date. |
| **GST impact (₹2.57)** | Not part of adopted tariff – to be claimed separately under **Change in Law**. |
| **Precedent** | Consistent with APTEL orders in NHPC Ltd. (Petition 154/AT/2024) and NTPC Ltd. (Petition 119/AT/2024). |

**Final Order:**

1. **Usage charges adopted:** **₹2.45/kWh** for the 1000 MW Solar PV Project under Tranche-III of CPSU Scheme Phase-II.

2. **Change in Law relief:** Liberty granted to Petitioners to approach APTEL via a **separate petition within 6 weeks** for relief under Articles 10 & 11 of the PUAs.

3. **Interim relief allowed:** MNRE-communicated Change in Law compensation (GST increase to 12%) may be charged by Petitioners on a **provisional basis** pending final Commission decision.

4. **Petition disposed of** accordingly.

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#### 7. Key Business Takeaways

| Takeaway | Implication |
|———-|————–|
| **Bid-date parameters are final** | Post-bid changes (even MNRE revisions) not automatically adopted – must go through Change in Law process. |
| **GST hike is Change in Law** | Recognized as compensable event, but requires separate petition. |
| **Interim relief allowed** | SJVN can provisionally charge ₹2.57 until final order – protects cash flow. |
| **Precedent set** | NHPC and NTPC received same treatment – consistent regulatory approach. |
| **DCR delays continue** | Project commissioning extended to Sept 2025 – monitor IREDA response. |

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