APTEL Gives Nod for Time Extension to SPD VCarve Solar Among Others In Karnataka

In a conflict between Vcarve Solar LLP versus Karnataka Electricity Regulatory Commission (KERC), Bangalore Electricity Supply Company Limited (BESS), APTEL has ruled in favour of the solar power developer. The apex regulator had bundled a number of similar petitions in the same judgement.

The various solar power developers (SPDs) has challenged multiple orders passed by the KERC with regards to the “farmers scheme” for developing infrastructure for solar energy. The appeals from various SPDs raise questions as to whether they are entitled to extension of time for commissioning of their respective generating plants. Further, as to whether the adverse consequences of delay, which are a result of the impugned decisions of the State Commission. The consequences range from fair dispensation, against the backdrop of the distribution licensees having agreed to, or consented for, extension of time as was sought. The appeals, however, have been countered by the distribution licensees in the State of Karnataka. A key plea of the SPD’s was that the impugned decisions were rendered when the law was yet to be settled. The issue of delays in farmer’s schemes for solar has been a long standing one, owing mostly to procedural issues, lack of experience of the developers, and other teething issues at the time.

Taking several similar cases with similar contentions by the SPDs as a precedent, the APTEL, basis relevant clauses of the PPA, has conferred discretion on the parties involved to amicably resolve the issue of delay in Commercial Operation Date (CoD).

The APTEL has said that in case of delay, in similar conflicts, the parties were expected by the contractual terms to sit across and agree to an extension if justifiable reasons were offered and if the same were covered by the clauses such as force majeure. Tellingly, APTEL’s judgement mentions that “In the above facts and circumstances, we find merit in the appeal. The State Commission has fallen into error by embarking on an inquiry into the reasons for delay so as to deny the benefit of extension agreed upon the parties in accordance with contractual provisions and also the contractual rate of purchase of electricity by BESCOM. The decision rendered by the Commission is neither just nor fair and, therefore, set aside”.

Similarly, in the current case in question, BESCOM had the discretion to agree or not to agree to the request for extension.

Against the above backdrop, it has been jointly submitted, including from the respondent distribution licensees, that the impugned orders be set aside and claims of the appellants seeking extension of time and consequential relief be remitted to the State Commission for revisit, in light of the settled law on the subject.

Further, it has been noted in the APTEL judgement, that the economic interest of appellants, who are small entrepreneurs, has suffered due to delayed judgement. Thus, it has ordered that the State Commission give priority to the reconsideration of the matters within three months’ time.