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APR 01 2015

TNERC divided on extension of Control Period of Tariff Order No.7 of 2014 on Solar Power

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 01st APR 2015

 TNERC looked extremely divided in the latest order on extension of Control Period of Tariff for Solar Power in the state. The order annexed here has the Chairman and one of the members ruling in favour of extension of the control period through a revised interpretation of the date of its implementation while one of the member and secretary ruling otherwise.

 This order is related to the Tamil Nadu Solar Energy Policy, 2012 issued by the Government of Tamil Nadu in the year 2012. With the object of implementing the said solar policy of the Government, the Commission issued Order No.1 of 2013 dated 07-03-20 13 in the matter of Issues Related to Tamil Nadu Solar Policy, 2012 prescribing among others, Solar Purchase Obligation (SPO) starting with 3% SPO till December 2013 and 6% SPO from January 2014 applicable to HT Consumers (HT Tariff I to V) and to LT Commercial Consumers (LT

Tariff V) with certain exceptions. However, Tamil Nadu Electricity Consumers Association and the Tamil Nadu Spinning Mills Association filed Appeal No.92 of 2013 and Appeal No.109 of 2013, respectively, challenging the order of the Commission before the APTEL. In order dated 21-01-2014, APTEL set aside the said order of the Commission.

 Thereafter, with the object of optimal exploitation of the solar energy for the sustainable energy base, the Commission made a Comprehensive Tariff Order on solar power. In para 11.5 of the said Solar Order, it has been mandated that the format of Energy Purchase Agreement (EPA) shall be evolved as specified in the Commission’s “Power Procurement from New and Renewable Source of Energy Regulations 2008”. Regulation 7 of the said Regulations provides that the Distribution Licensees shall file a model Energy Purchase Agreement / Energy Wheeling Agreement after discussions with the generators / open access customers for the approval of the Commission within one month of the issuance of tariff order by the Commission.

 The Distribution Licensee, TANGEDCO submitted the model Energy Purchase Agreement in the matter of Solar Power on 10-12-2014. The Commission after scrutiny could approve the said model EPA on 21-01-2015. The commission said that it looks obvious that the solar power generators could move towards  financial closure only after their having executed the Energy Purchase Agreements in the form duly approved by the Commission with the Distribution Licensee.

 Even after the approval of the PPA by the Commission, there was no tangible growth in the solar capacity in the State. The Commission noticed that after the approval of EPA by the Commission, the balance period left in the original control period is less than 8 months though the intention of the Commission was to give clear one year as control period. The Commission thus felt that within the said balance period of less than 8 months out of the control period of one year, execution of individual EPA by the prospective developers, achieving by DiscountSmasher" href="#23851411"> financial closure thereafter, procurement, erection, testing and the commissioning of the solar plant will be very difficult. As a result, additional solar power generation in the State may not happen even to the level of a reasonable RPO obligation which is being advocated in the National Action Plan for Climate Change and National Tariff Policy.

 Therefore considering the date of approval of the Energy Purchase Agreement by the Commission on 21-01-2015 and the time that would be required by the Generator / Licensee thereafter for execution of the agreements and other subsequent activities, the Commission considers that the ends of justice will be met if the control period specified in the said order is modified suitably to bring out the intention of the Commission to provide one full year in clear terms.




Tamil Nadu WHEELING Tamil Nadu Generation and Distribution Corporation Ltd Renewable Purchase Obligation Open Access Solar Energy Power Generation Tariff Energy Inter Ministerial Group Appellate Tribunal for Electricity Tamil Nadu Electricity Regulatory Commission Solar policy Power Tariff policy Electricity solar power National Tariff Policy Solar WHEELING

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