GERC Allows Compensation To Juniper Energy For ‘Change Of Law’

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The Gujarat Electricity Regulatory Commission (GERC), in its latest judgement, allowed Juniper Green Sigma Pvt Ltd compensation for ‘change of law’ events. Juniper Green Sigma is a subsidiary of Juniper Green Energy.

It has developed a 120-megawatt (MW) grid-connected solar plant in Gujarat to supply Gujarat Urja Vikas Nigam Limited (GUVNL). Juniper, in its petition before the GERC, said that the Ministry of Finance earlier in 2018 had issued an order imposing a safeguard duty on imported solar cells for two years up to July 29, 2020. 

The petitioner meanwhile submitted its bid on February 6, 2019, and won the bid from GUNVL on February 21, 2019, at the rate of Rs 2.67 per unit. It also signed a Power Purchase Agreement (PPA) on May 21, 2019. However, on July 29, 2020, the Ministry of Finance extended the safeguard duty on imported cells and modules, leading to an additional financial burden to Juniper Energy. As per the details furnished by the solar developer, the company suffered an additional financial burden of Rs 38.52 crore (including additional GST). 

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The GERC order said, “In the present case, as decided and recorded above, the safeguard duty and IGST paid on solar modules paid by the Petitioner of Rs. 38,33,18,557/- be permissible to pass on as Change in Law effect. Further, as recorded earlier, the interest on the safeguard duty and IGST paid by the petitioner for the period from the date of payment of safeguard duty and IGST to the date of this Order worked out to 15.97 paise per unit. Thus, the total amount of change in law permissible consists of safeguard duty plus IGST paid on it, and interest/carrying cost up to commissioning of the plants is worked out at 0.21 paisa per unit. Therefore, the incremental tariff is worked out to 16.18 paisa per unit (16.18 paisa per unit towards SGD plus IGST and 0.21 paisa per unit as interest cost).”

It also added, “In view of the above observations, the present petition partly succeeds. We decide that a Change in Law occurred as claimed by the petitioner as per the provisions of PPA dated 21.05.2019 executed between the parties. The petitioner is eligible for compensation towards SGD and IGST paid and interest on it worked out as 16.18 paisa per unit as Chang in Law amount,” the GERC order read. 

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