GERC rejects GUVNL's petition seeking solar tariff cut

Citing delay and non-jurisdiction, the state power regulator Gujarat Electricity Regulatory Commission (GERC) on Monday rejected state discom Gujarat Urja Vikas Nigam Limited (GUVNL)'s petition seeking reduction in solar tariff.

GUVNL had filed the petition with the state regulator last month citing unjustified tariff charged by solar developers, who had signed power purchase agreements (PPA) for 971.5 Mw for a period of 25 years.

However, GERC dismissed the petition stating that the review petition should have been made within 60 days from the date of order whereas GUVNL had filed the petition with delay of more than three years.

"Regulations 72(3) of the GERC (Conduct of Business) Regulations, 2004 provide for review of an order within prescribed period of 60 days from the date of such order . In the present case, the petitioner has filed a petition with delay of more than 3 years without any condonation of delay application and is thus not maintainable and hence is liable to dismiss," GERC stated in its order.

According to the regulator, GUVNL had invoked protection of consumer interest stating that they should not be burdened with higher tariff for the solar power projects.

"We note that the Power Purchase Agreements were signed by the Petitioner with the Respondents with consideration of tariff determined by the Commission and its impact on the consumers in the tariff rate. Thus the petitioner was fully aware of the impact of signing of the PPAs and has so far incorporated this impact in their ARRs," GERC stated in the order.

GERC was also of the view that the regulator did not have necessary powers to re-open of the solar power purchase agreements (PPA).

"Under Section 108 of the Electricity Act, 2003 the Government is empowered to pass an order and direct the Commission in the matter of Policy involving the public interest. Thus, the aforesaid sections of the Act do not provide any power to the Commission to reopen a PPA and to re-determine the tariff decided by the Commission as pleaded by the petitioner. On this ground also the present petition is not maintainable."

GUVNL had found that the developers incurred capital costs in the range of Rs 10-13 crore per megawatt (MW) with weighted average working out to be around Rs 12 crore per Mw.

In its petition, GUVNL had maintained that 'there is no justification for any of the project developers to claim the capital cost of Rs 16.50 crore.'

Hence GUVNL maintained that the present average tariff of Rs 12.54 per unit, which is arrived upon after considering the higher capital cost is unwanted, unjustified and windfall gain to the project developers.

"The developers are receiving the levelised tariff of Rs 12.54 per unit as against around Rs 9 per unit which is the reasonable and prudent tariff.

The increased tariff of Rs 3.54 per unit is a direct burden on the consumers of the state," GUVNL's petition had said.

Earlier, most of the 75 solar developers had strongly objected to the petition submitted by the state discom. The developers include major energy players including Adani Enterprises, Tata Power, Essar Power and Moser Baer among many others.