APTEL’s Relief To ACME Over COVID-Linked ‘Force Majeure’

APTEL's Relief To ACME Over COVID-Linked 'Force Majeure'

The Appellate Tribunal For Electricity (APTEL) has now ordered in favour of ACME Heergarh Powertech Private Limited in a case related to force majeure, triggered by the COVID pandemic. The judgment was passed after the petitioner (ACME) approached the apex body by challenging an impugned order, earlier passed by the Maharashtra Electricity Regulatory Commission (MERC).

ACME Heergarh Powertech Private Limited earlier commissioned a 300 MW solar project at Bhadla in Rajasthan on May 23, 2022. It won the project at a tariff of Rs 2.72/kWh. It has signed a Power Purchase Agreement (PPA) with MSEDCL (Maharashtra discom) for supply of the solar power generated from this project. It has also furnished a Performance Bank Guarantee of Rs 24 crore, which is meant to be forfeited in case of delays and defaults.

Case Details 

As per the signed PPA, the Scheduled Commercial Operation Date (SCOD) was fixed at July 26, 2021. However, due to two waves of COVID-19, the petitioner alleged disruptions in the global and domestic solar supply chain, which apparently delayed the supply of solar modules for the project. In the hearing on the same matter, MERC gave the firm partial relief from this by accepting the disruptions as ‘force majeure’. However, unsatisfied with the MERC order, ACME moved APTEL for more relief.

The impugned order of MERC allowed the extension of SCOD till April 19, 2022 and not till the original date of commissioning which was May 23, 2022. MERC considered the cessation date of force majeure as December 31, 2022.

APTEL Observation 

APTEl said that ACME in the interlocutory application, attached the bills of loading which mentioned that the shipments from China were shipped only in February and thus it is wrong on the part of the Commission to decide that the FM event ended on 31.12.2021, it said.

“The table reflects that the orders were dispatched as late as 26.02.2022 and the Commission yet continued to consider the date of delivery as December 2021. 80. Furthermore, it has been submitted by the Appellant that the original date of delivery from China is between 22.02.2022 and 09.03.2022,” APTEL said.

Final judgement

“Considering the same, the duration of the FM event for disruption in the supply chain is to be considered from 26.11.2021 to 09.03.2022 i.e. 104 days. However, since the Appellant commissioned on 23.05.2022 with a delay of 70 days therefore the delay is condoned till the original date of commission only,” it added.

In its final judegement, APTEL said, “For the foregoing reasons as stated above, we are of the considered view that the captioned Appeal No. 330 of 2022 is allowed. The impugned order of the Commission in Case No. 07 of 2022 dated 07.07.2022 is set aside. The SCOD for the commissioning of the project is extended up to the actual date of commissioning i.e. 23.05.2022, the Appellant is entitled for all consequential benefits accordingly.”