APTEL Sets Aside HERC Ruling, Awards Right To Sell Solar Power At Rs 5.68/unit

The Appellate Tribunal For Electricity (APTEL), in a key judgement involving the Haryana Electricity Regulatory Commission (HERC), the Haryana Power Purchase Centre and some individual petitioners, issued an order setting aside the decision of HERC.

In its order, the APTEL bench directed the HPPC to enter into a PPA to purchase power at the rate of Rs 5.68/unit, the rate APTEL had established in 2016-17 in another order. In doing so, the bench did not just set aside the order of HERC, but also their contention that not enough progress had been made on establishing the 11 MW of solar power plants that the petitioners had won the rights to in a bidding process that was subsequently declared foul by HERC.

The bidding process in question was kicked off in 2016 for 150 MW of solar power, that found its list of winners, before being set aside by the HERC Chairman by using his casting vote. The Chairman of the Commission in exercise of casting vote, held that the competitive bidding process initiated by the 2nd respondent Haryana Power Purchase Centre for procurement of 150MW of solar power on long term basis in the year 2015, is not in line with the competitive bidding guidelines for renewable energy generators under Section 63 of the Electricity Act, 2003 and also that the deviations were not approved by the Commission, and therefore, declined to approve the Power Purchase Agreements (PPAs) of the appellants.

Here are the key insights from the document:

• Appeal Background: The appellants challenged the Haryana Electricity Regulatory Commission’s decision to reject their Power Purchase Agreements (PPAs) for solar power procurement, citing non-compliance with competitive bidding guidelines.
• Commission’s Decision: The Commission’s Chairman rejected the PPAs, stating the bidding process lacked transparency and did not follow standard guidelines, while the lone Member dissented, arguing the absence of specific guidelines.
• Tribunal’s Ruling: The Appellate Tribunal for Electricity found the Commission’s order erroneous, noting the appellants had made significant progress in their projects and the bidding process was conducted in good faith.
• Outcome: The Tribunal set aside the Commission’s order and directed it to approve the PPAs, emphasizing the need to promote renewable energy projects.

The ruling by the Appellate Tribunal for Electricity has several important implications:

1. Promotion of Renewable Energy: By directing the Haryana Electricity Regulatory Commission to approve the Power Purchase Agreements (PPAs), the Tribunal is reinforcing the importance of supporting renewable energy projects. This decision encourages the development of solar power projects, which is crucial for sustainable energy goals.
2. Legal Precedent: The ruling sets a legal precedent that emphasizes the need for transparency and adherence to guidelines in the bidding process for renewable energy projects. It highlights that significant progress and good faith efforts by developers should be recognized and supported.
3. Investor Confidence: This decision can boost investor confidence in the renewable energy sector, as it demonstrates that regulatory bodies and tribunals are willing to support projects that follow due process and contribute to green energy goals.
4. Regulatory Clarity: The Tribunal’s emphasis on the need for clear guidelines and transparency in the bidding process may prompt regulatory bodies to refine and clarify their procedures, ensuring a more consistent and fair approach in the future.

Overall, this ruling is a positive step towards fostering a more robust and supportive environment for renewable energy projects in India.