NREL Wins The Battle Of Commissions With GUVNL For 350 MW Solar Projects

In a battle involving 350 MW of delayed solar projects in Gujarat, NTPC Renewable Energy Limited has won an early win, with the CERC going with its contention that the Central Regulator is the right forum for any dispute with the state discom, GUVNL, in this case.

NREL, the wholly owned subsidiary of NTPC, had petitioned the CERC bench for allowing the petition, and granting a 13 month 13 day extension for the 200 MW project, and 15 months for the 150 MW solar project. It cited a list of reasons for the delay in execution. These are:

i) Restriction imposed across the country on account of second surge of COVID-19 resulting in delay in completion of project activities.

ii) Energy crisis in China which led to disruption of supply chain of Solar PV Modules and other equipments which are imperative for construction of a Solar Power Project.

iii) Geopolitical situation caused due to Russia-Ukraine war resulting in imposition of sanctions and disruption of supply chain of raw material and equipments.

iv) Non-consideration of Change in Law reliefs towards rise in rate of Goods and Services Tax (GST) on Solar Projects.

In addition, following are the force majeure events in Petition No. 279/MP/2022 for 150 MW project.

i) Delay in grant of extension of 76 days by GUVNL on account of second surge of COVID-19.

ii) Non-consideration of Change in Law reliefs towards imposition of Basic Custom Duty (BCD) on Solar PV Modules.

GUVNL, on its part simply contested the petition by claiming that as per PPA and norm, the right forum for the dispute was GERC (Gujarat State Electricity Regulatory Commission), and NREL was simply ‘Forum shopping’. It denied that CERC had jurisdiction over the issue.

Based on a detailed perusal of the projects and arguments, the CERC determined that it was indeed the right forum as NREL, being a wholly owned subsidiary of NTPC Limited a Generating Company owned and controlled by Central Government. It did rap NREL for not checking the PPA carefully where it had mentioned GERC as the relevant authority for disputes.

On the GERC jurisdiction as per PPA signed by both parties, it averred that it is a well settled principle of law that the parties by their agreement can neither confer jurisdiction upon a forum which does not have the jurisdiction under the law nor can the parties by their agreement oust the jurisdiction of the forum vested under the law.

Thus, admitting the petition and disallowing GUVNL from taking any coercive action including encashment of performance guarantees. The full order can be viewed here. Watch this space for the eventual order!