AC/DC Ratio And Impact on CUF- APTEL Directs HERC To Do The Numbers

In an interesting case originating in Haryana, the Appellate Tribunal For Electricity (APTEL) bench has sent the parties involved back to the Haryana Electricity Regulatory Commission (HERC). The intent was to enable the state commission get a chance to actually do the prudent thing and calculate the impact of considering the AC/DC ration as 1:1 in calculating project costs, and its subsequent impact on mandated project CUF.

The case involved M/S Greenyana Solar Private Ltd. which filed an appeal against the Haryana Electricity Regulatory Commission (HERC) order dated 29.01.2024. The dispute centers around the determination of tariff for a Power Purchase Agreement (PPA) for a solar PV project.

Core Issues:

• • Issue A: Whether the capital cost determination based on AC:DC ratio of 1:1 is correct.
  • Issue B: Deduction of amounts already recovered before signing the PPA.
  • Issue C: Alleged errors in computing the levelized tariff.

Greenyana’s counsel depended mostly on precedent where APTEL had allowed a loading of 10% or higher when it came to AC/DC ration to enable a solar plant meets its stated CUF target.

Appellant’s Argument:

• The HERC restricted DC capacity to 10.72 MWp (AC:DC ratio of 1:1) instead of considering the actual installed DC capacity of 14.90 MWp.
• This resulted in a reduced tariff of Rs. 2.35/kWh compared to the claimed Rs. 2.75/kWh.Respondent’s Counterpoints:
  • HERC’s decision to apply a mandatory 21% CUF (Capacity Utilization Factor) was supported by prevailing market trends.

  • They argued that the appellant’s request for additional tariff lacks justification.

    

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    Aptel Tribunal’s Observations:

    • There’s a need for the State Commission to undertake a prudence check on the required AC:DC ratio to achieve the prescribed CUF.
    • The tribunal decided to remand the matter back to HERC for further evaluation, emphasizing transparency in project-specific tariff determination.

      Interim Relief:

      • A provisional tariff of Rs. 2.50/kWh has been allowed until final adjudication.

The appeal addresses technical and regulatory discrepancies in tariff computation and seeks resolution through procedural reconsideration.