Vivid Solaire’s Plea to Align LTA with Revised SCOD of Project Shot Down by CERC

CERC Approves Trading Margin of Rs.0.07/kWh in SECI's PSAs with Distribution Firms

The Central Electricity Regulatory Commission (CERC) has rejected the petition of Vivid Solaire Energy Private Limited to reconsider Long-Term Access (LTA) to coincide with the revised SCOD of project and waive the transmission charges.

In its petition, the Pune-based firm had filed a petition seeking a waiver for the levy of transmission charges by CTUIL upto the revised Scheduled Commercial Operations Date (SCOD) under its Power Purchase Agreement (PPA) dated 14.10.2021.  Additionally, it sought refund worth Rs. 2,73,07,397 it paid as transmission charges by periods in respect of which an extension of the SCOD had been granted by SECI. It petitioned that all the bills raised by CTUIL seeking payment of transmission charges be rejected for the period up to the revised Scheduled Commercial Operations Date.

Betam Wind Energy Private Limited (BWEPL) had emerged as a successful bidder in the competitive bid process conducted by the Solar Energy Corporation of India (SECI). Vivid Solaire was established by BWEPL as a wholly owned Special Purpose Vehicle to implement wind power projects. The Pune-based firm is thus setting up a 200 MW wind power project in the Tuticorin District in the State of Tamil Nadu.  Vivid Solaire was granted stage-II connectivity for the project with connectivity at the Tuticorin-II GIS pooling sub-station by CTUIL vide its letter dated 13.7.2018.

Vivid Solaire had entered into a connectivity agreement with CTUIL as on 7.8.2018 and submitted Conn-BG for an amount of ₹5 crore to CTUIL. It also signed a PPA dated 4.9.2018 with SECI for 200 MW at ₹2.51 kWh. The SCOD of the project as per the PPA was 29.2.2020.

Given the extension of the SCOD by SECI to 14.10.2021, the firm requested the CTUIL to extend the date of LTA operationalization for the 200 MW capacity from 31.7.2019 to 14.10.2021, that is, upto the extended SCOD in line with the MoP directive dated 15.1.2021

Vivid Solaire claimed that even though it had made significant progress of the project, certain unforeseen events (The pandemic, delays in land acquisition et al) prevented it from completing it by SCOD, that is, 29.2.2020.

SECI based on the Office Memorandums (“OM”) dated 13.8.2020, 12.5.2021 and 29.6.2021 issued by the MNRE extended the SCOD of the Project under the PPA up to the revised SCOD, that is, 14.10.2021 without imposition of any penalties/ damages as laid down by the PPA for delay. Vivid Solaire also issued “force majeure”, however, CTUIL did not give its nod for the extension of the date of commencement as well as period of LTA. Consequently, this has given rise to a discrepancy between the LTA commencement/operationalization date and the date by which the Vivid Solaire is required to commission its project.

As mandated by a Clause of the National Tariff Policy 2016, the Central Government is empowered to grant waivers to renewable energy projects from the requirement to bear transmission charges and losses for the transmission of electricity generated by such projects for sale through the ISTS system to promote the development of the renewable energy sector. The MoP orders dated 23.11.2021 and 30.11.2021, issued in line with the 2016 Tariff Policy and the MoP Rules granting waiver of transmission charges, are applicable to Vivid Solaire. That apart, the CERC observes that the SCOD has been validly extended by a competent authority, SECI, in terms of the provisions of the PPA executed by the petitioner with SECI.

Consequently, with the change in the regulatory framework, Vivid Solaire is entitled for an extension in the period of LTA and date of commencement of LTA. It is entitled to alignment with the revised SCOD under the PPA, given the relaxation granted by the MoP vide latest MoP orders dated 23.11.2021 and 30.11.2021.

Further, the CERC noted that Vivid Solaire’s LTA was operationalized on 31.7.2019 and the MoP’s orders are applicable. It has thus pronounced that Vivid Solaire resting its claims on the MoP orders dated 15.1.2021, 23.11.2021 and 30.11.2021 is misplaced.

Consequently, Vivid Solaire’s petition to match the commencement of LTA with revised SCOD of project and waiver of the transmission charges has been quashed by CERC. Besides, the request of the firm to refund the transmission charges already paid has become infructuous and has been shot down too.