Partial Relief For Amplus At APTEL For 50 MW Haryana Solar Plant

In an order that tackled cross appeals filed by Amplus Solar and Haryana Power Purchase Centre for the same project, the Appellate tribunal for Electricity (APTEL) saw it fit to send the parties back to the state regulator to sort out the issue.

Case Overview:

Amplus had set up a 50 MW solar project in Bhiwani, Haryana for group captive/third party sales. However, even as the project was ready for commissioning by the end of Fy20-21, certain technical issues like evacuation of power from the project, installation of meters which required approvals from State Utilities of Haryana delayed start. Refusal by HVPNL to sign and execute the Connection Agreement, forced Amplus to seek HERC’s intervention in the matter. HERC, in its wisdom, asked the parties involved to arrive at a mutual settlement. Following which, Amplus, without prejudice to its rights and contentions, consented to the sale of power from its Project to Haryana Discoms including determination of project specific tariff for the Project under the applicable regulations, subject to fulfilment of conditions and necessary regulatory approval by the State Commission, and initialed the Draft Power Purchase Agreement (PPA) provided by HPPC.

However, when the final agreement was filed after due process for tariff approval, on 18.01.2021, the HERC passed the Impugned Order restricting the claim of the Appellant for a levelized tariff of Rs. 3.86/Kwh for 25 years to Rs. 2.48/Kwh. That is what brought Amplus knocking at APTEL’s door, while HPPC filed its own counter appeal disputing the calculation of project costs and more.

Key Issues: The main issues include the determination of project-specific tariffs, capital costs, and Capacity Utilization Factor (CUF). Amplus claims higher costs and CUF due to additional DC capacity, while HPPC disputes these claims.

Capital Cost: Amplus has claimed a capital cost of Rs 275.40 Crore for 50 MW project which included DC capacity of 75 MW and contracted AC Capacity of 50 MW. HERC while determining the Project Specific Tariff has disallowed the module cost and cost of civil works to the extent of Rs 44 Crore (allowed Rs 88 Crore against claim of Rs 132 Crore) and Rs 6.81 crore (allowed 13.60 Crore against claim of 20.41 Crore) respectively relatable to 25 MW DC capacity. HERC has considered DC capacity of 50 MW whereas the installed capacity is 75 MW (DC) (corresponding to 50 MW AC capacity). Amplus claims that such disallowance is contrary to accepted industry practice, where generators optimise installed Alternate Current (“AC”) capacity by installing Solar panels of higher Direct Current (“DC”) without exceeding the contracted capacity. 75 MW (DC) was essential in order to maintain the requisite CUF of 25.91% approved by HERC. Thus, on one hand, the benefit of higher CUF has been passed on to the procurers but the capital cost incurred for such CUF has been disallowed. This is contrary to settled tariff determination principles.

These changes are causing a loss of Rs 14.7 cr annually to Amplus, complained the firm.

Other issues included interest on loans taken by Amplus (a lower figure was taken) and escalation rate of O&M costs.

Judgement: The tribunal has set aside the previous order of HERC and remanded the matter to the Haryana Electricity Regulatory Commission (HERC) for re-evaluation of tariffs and costs, allowing an interim tariff of Rs. 3.03 per kWh for Amplus, providing partial relief to the developer.

Next Steps: HERC is to conduct a prudence check on capital costs and CUF, and re-determine the tariff accordingly. The decision is to be expedited.