Levies fine on state agency for non-complying its order
In a first, the Madhya Pradesh State Electricity Regulatory Commission (MPERC) has slapped fine on the state government and asked to pay dues to Adani Green Energy. The MP Power Management Company (MPPMCL) has been delaying payment to the company providing wind power to the state for close to a year. The regulator has asked the state agency to clear dues in 45 days.
“The Commission directs the respondent (MPPMCL) to pay all the legitimate dues in terms of PPA to the petitioner (Adani) within 45 days of this order. The Commission also directs the respondent to pay a penalty of Rs 1,00,000 to the Commission within 45 days towards non-compliance of the Commission’s order,” the order said.
The order is likely to pave way for timely payment to renewable power producers who are facing delays and pending dues to cash crunch nature of most power distribution companies across India.
The matter pertains to year old case of payment delays by MPPMCL to wind power producers in the state. After delaying payment for more than a year, it also asked the producers to “offer rebate of one per cent on outstanding dues to expedite the payment of dues”.
As many as 266 power purchase agreements (PPAs), signed by around 50 companies operating in the state, were impacted by the delay in payment. The cumulative capacity of wind power in the state is 2,400 Mw. Adani Green Energy moved MPERC contesting the delay and the rebate asked by the state. While several players agreed to offer rebate, many were awaiting a suitable decision in the Adani’s case.
MPERC in July 2017 directed MPPMCL to pay the dues but it delayed it further citing that the agreement with Adani is for 25 years and it can pay during the period of the agreement.
The MPERC came down heavily on the state agency saying the non-payment is clear non-compliance of the Commission’s order by the Respondent (MPPMCL). “The Commission’s order cannot be read as a direction for non-payment of bills till the life of PPA, as being contended by the respondent. The Commission’s Order also directed the respondent to make suitable arrangements so that in future such delay is avoided. It clearly shows that Commission’s order is to avoid such delay in payment in future, whereas the respondent is maintaining that it can continue to delay the payment,” the order said.
This is second jolt to the Madhya Pradesh in recent time. Last month, the Supreme Court quashed the cancellation of power purchase agreement of MP with ReNew Power.