Home India KERC can’t unilaterally fix power purchase tariff: HC
KERC can’t unilaterally fix power purchase tariff: HC

KERC can’t unilaterally fix power purchase tariff: HC

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Bengaluru: If there is no request coming from either of the parties for a power purchase agreement (PPA), the Karnataka Electricity Regulatory Commission (KERC), the energy regulator in the state, cannot determine tariff.
The high court made this observation while quashing the retrospective imposition of wheeling and banking charges on renewable energy developers by the commission.

Renew Energy Limited and others had challenged the May 14, 2018 suo motu order of the KERC, asking them to pay 25% of their tariff as wheeling and 2% as banking charges. With that order, exemptions to solar projects from paying the wheeling and banking charges were restricted to plants commissioned on or before March 31, 2017.

Justice S Sujatha said all the renewable energy projects (other than captive generators) availing the benefit of renewable energy certificate (REC), which have not completed 10 years of commercial operation as on March 31, 2018, are liable to pay 25% of their normal transmission charges (wheeling charges) and 2% as banking charges.

The judge said it is not justifiable to withdraw the exemption after entering into statutory contract guaranteeing exemption from payment of wheeling and banking charges to the new renewable energy projects commissioned on or before March 31, 2018. Also, the KERC has not been able to demonstrate as to why exemptions are sought to be withdrawn.

KERC had contended that capital costs of solar power generation have gone down from Rs 6 crore per MW in 2015-16 to Rs 4.63 crore in 2017-18. The state defended the commission’s order saying it has power to determine tariff from time to time and the imposition of charges were in public interest.

Source: timesofindia.indiatimes
Anand Gupta Editor - EQ Int'l Media Network