MP Solar Developer Directed to Pay Up To CTUIL By APTEL

In an appeal taken all the way to APTEL by SEI Sunshine Power Pvt. Ltd. and its group companies against the Central Electricity Regulatory Commission (CERC), the apex regulator went with the latter in directing the firm to pay up as directed by CERC earlier. The amount involved is Rs 18.25 crores approx.

Issue: The main issue revolved the liability of SEI Sunshine Power Pvt. Ltd. and its group companies to pay transmission charges for the period of mismatch between the generation project and the transmission system. SEI Sunshine Power Pvt. Ltd. and its group companies have solar power projects in Madhya Pradesh. They executed Power Purchase Agreements (PPAs) and Long-Term Access (LTA) agreements for the transmission of power. Due to delays in commissioning the projects, there was a mismatch period during which the transmission system was available, but the generation projects were not operational. With agreements for 180 MW of solar with CTUIL and Powergrid envisioning project commissionings latest by 20.04.2020, the generator found itself facing delays, despite MNRE specifically allowing RE firms to proceed on projects during lockdowns as well. Keep in mind that the projects were originally to be commissioned by 15.07.2015.  With MNRE effectively confirming the period of lockdown for such firms as between  25.03.2020 to 31.05.2020, SEI Sunshine Power found itself in breach of the contract by promising a COD only by 24.10.2020.

The Arguments:

The appellants argued that the delay was due to force majeure events, including the COVID-19 pandemic, and that they should be exempt from paying transmission charges for the mismatch period. They also cited various orders and regulations that provide waivers for transmission charges for renewable energy projects.

Respondent’s Position: The respondents, including CERC and Central Transmission Utility of India Limited (CTUIL), argued that the appellants are liable to pay transmission charges as per the regulations, and the waivers do not apply to the mismatch period.

Judgment: The tribunal upheld the CERC’s order, stating that the appellants are liable to pay transmission charges for the mismatch period. The tribunal found that the waivers for transmission charges apply only after the commissioning of the generation projects and not during the mismatch period.