Petition of the CERC (Conduct of Business) Regulations of the Power Purchase Agreement with Solar Energy Corporation of India Limited to 160 MW blended Wind Power Project in the State of Karnataka – EQ

Summary:

—

1. **Petitioner’s Submission:** The counsel for Vena Energy submitted that this petition seeks approval for Change in Law claims due to:
– **Imposition of Basic Customs Duty (BCD)** on import of solar modules via MNRE’s Office Memorandum dated March 9, 2021, read with the Finance Act, 2022 (March 30, 2022).
– **Increase in Goods & Services Tax (GST)** via Notification No. 8/2021 – Central Tax (Rate) dated September 30, 2021, issued by the Ministry of Finance.

2. **Prior CERC Ruling:** The Commission had already ruled on January 12, 2024, in **Petition No. 49/MP/2023** (filed by the same Petitioner) that the above events **qualify as Change in Law events**. The Petitioner was allowed to file a substantive petition once the claimed amounts were crystallized.

3. **Components of Claim:** The Petitioner’s Change in Law claims include:
– BCD on solar modules, including consequential levy of Social Welfare Surcharge and GST.
– GST on Solar Power Generating System – Balance of Supply.
– GST on Wind Turbine Generators.

4. **Partial Acknowledgment by SECI:** SECI has already **partially acknowledged** the claim for BCD on solar modules.

5. **CERC’s Directions:**
– **Admitted** the petition and issued notice to the Respondents.
– Directed Respondents to file replies (if any) within **four weeks**, with a copy to the Petitioner.
– Petitioner may file rejoinder(s) within **three weeks** thereafter.
– Next hearing listed for **June 23, 2026**.

—

### Business & Legal Points

| Aspect | Implication / Detail |
| :— | :— |
| **Nature of Proceeding** | A “Change in Law” petition under Section 79(1)(f) and (k) of the Electricity Act, 2003. Such provisions allow a generator to claim additional compensation if an unforeseen change in law (e.g., new taxes, duties) increases project cost or reduces revenue after the PPA was signed. |
| **Key Legal Precedent** | CERC has **already confirmed** (in Jan 2024) that BCD imposition and GST increase qualify as Change in Law events. The current petition is for **quantification and approval** of actual monetary claims. |
| **Partial Admission by SECI** | SECI’s partial acknowledgment of the BCD claim is significant. It reduces the dispute scope, though the extent of partial acceptance and reasons for non-acceptance of the remaining amount will be key in replies. |
| **Claims Breakdown** | The petitioner is seeking relief on three distinct cost impacts: <br> 1. BCD + Social Welfare Surcharge + GST on solar modules <br> 2. GST on balance of supply for solar system <br> 3. GST on wind turbine generators — *This last item suggests the project blends wind and solar, with both affected by GST changes.* |
| **Business Risk / Opportunity** | – **For Vena Energy:** A favorable order would compensate for unanticipated import duties and tax increases, protecting project returns. <br> – **For SECI:** As the intermediary procurer, it will need to pass through verified claims to the ultimate off-taking discoms, or defend against non-allowable items. |
| **Timeframe** | With replies due in ~4 weeks (mid-May 2026), rejoinder in ~3 weeks thereafter (early June 2026), and next hearing on June 23, 2026, a final order may be expected by Q3 2026. |
| **Strategic Takeaway** | Projects with “Change in Law” clauses in PPAs executed before tax/duty changes (pre-2021-22) have a clear legal path to claim compensation. However, **crystallization and proof of actual payment/incurrence** are critical for successful claims. |

—-

For more information please see below link: