KERC Reinstates Tariff of ₹4.79/unit for Adani Green Energy

The Karnataka Electricity Regulation Commission (KERC) passed two orders in favor of Adani Green Energy Limited’s (AGEL) solar plants of 20 MW each. Both the projects were part of a tender by Karnataka Renewable Energy Development Limited (KREDL) for 290 MW of solar projects for 17 talukas across Karnataka. The distribution companies (DISCOMs) Hubli Electricity Supply Company Limited (HESCOM) and the (KREDL) were directed to pay AGEL the tariff of ₹4.79 / kWh for both the projects as mentioned in the power purchase agreement. The firms had refused to do so on the grounds of delays in project completion, going by the tariffs prevailing at the time of completion. Both the solar projects are situated in Byadagi Taluk of Haveri District and Chanapatana Taluk of Ramanagara District respectively.

Project centric

On May 2016, Adani was granted the letter of award (LoA) for the Bydagi project and Chanapatana project respectively. A supplemental PPA (SPPA) was executed, incorporating a few corrections and modifications between Adani and HESCOM. On January 30, 2018, AGEL received the inter-connection approval from KPTCL for connecting the project with the substation on the same day.

According to the PPA for both the projects, the developer had to achieve the financial closure, obtain evacuation approval, and documentary evidence of having clear title and possession of the land within eight months from the effective date of the PPA, unless the project was affected by any force majeure event. The scheduled commissioning date for the project was one year from the PPA signing date.

According to Adani, there was considerable delay in PPA approval by the Commission. Meanwhile, It also said that the effective date of the PPA needed to be revised from October 4, 2016, to December 28, 2016, when the supplemental PPA with modified terms was signed. Although HESCOM and KTCPCL stated that the delay in commissioning has occurred due to Adani’s inability to fulfill the conditions on time, including land, labor, and procure material on the site. The respondents argued there was no need for Adani to wait for the approval of the SPPA to apply for the conversion of the land. Both HESCOM and KPTCL blamed Adani for the delay. They added that the developer had to notify force majeure within seven days as stipulated under PPA, which Adani didn’t.

Adani received the interconnection approval from the KPTCL on February 28, 2018, to connect the project within the KPTCL grid at the Byrapatna substation and successfully commissioned the project on March 2018. Like the Bydagi project, this project also suffered at the hands of governmental delays in land conversion, PPA approval delay, and demonetization. Moreover, in this case, Adani added that there were extraordinary delays in customs clearance of solar modules imported at the Chennai Port and Nhava Sheva Port due to wrong classifications.

The order noted that the PPA signed on June 28, 2016, guaranteed a tariff of ₹4.79/kWh. HESCOM had extended the timeline to March 15, 2018, for the project’s scheduled commercial operation. KERC ordered that Adani was liable to the agreed tariff of ₹4.79 /kWh.