Decided on April 20,2015

Indian Wind Energy Association And Ors. Appellant
Andhra Pradesh Electricity Regulatory Commission And Ors. Respondents


Rakesh Nath, Member (T) - (1.) THESE petitions have been filed by the Associations of Wind Energy Generators, Developers and Manufacturers of Wind Turbine and Association of developers of small hydro power projects seeking certain directions from the Tribunal under Section 121 of the Electricity Act, 2003 regarding compliance of Renewable Purchase Obligations ("RPO") by the distribution licensees and other obligated entities as specified by the State Electricity Regulatory Commissions and Joint Electricity Regulatory Commissions.
(2.) IT is provided under Section 121 that before issuing any direction to the State Commission, they have to be heard. Therefore, notice was issued to all the Central/State and Joint Commissions and they were requested to file their replies and make submissions. Accordingly, various State Commissions/Joint Commission participated in the proceedings through their Counsel. Union of India through Ministry of New and Renewable Energy ("MNRE") was also impleaded as a Respondent on the basis of an Application filed by MNRE. The petitioners have made the following submissions: - - "(a) The petitioners have been compelled to prefer the present petition under Section 121 of the Electricity Act, 2003 against the failure of various utilities and captive consumers to fulfill the RPOs as per the Regulations of the State Commission. The State Commissions have notified the renewable purchase obligations fixing minimum RPO of distribution licensees and other entities. The State Commissions have failed to implement such Regulations in discharging their obligations under Section 86(1)(e) and 61(h) of the Electricity Act, 2003, therefore, failing to discharge their obligations in true letter and spirit. The State Commissions instead of ensuring the fulfillment of RPO are allowing time and again deferment of compliance of the RPO, contrary to the terms of the Regulations. In few cases, the utilities have been allowed to carryover the obligations. In some cases, exemptions are also granted when the obligated entities have not fulfilled the specified RPO. Carry forward of RPO allowed for a year is waived in the subsequent order. (b) The Central Commission has notified Renewable Energy Certificate (REC) Regulations, 2010 for promotion of renewable energy generation. The obligated entities who are unable to procure renewable energy can utilise REC to meet their RPO obligation. However, it is seen that despite the availability of RECs, distribution licensees are not procuring RECs and the State Commissions in such cases have been allowing carry forward of the RPO. This has adversely affected the renewable energy generators who have opted for REC. (c) National Action Plan of climate change has set target of 5% Renewable Energy Purchase for 2009 -10 which will increase by 1% per annum for next 10 years. The Action Plan further recommended strong regulatory measures to fulfill the renewable energy target. (d) The Tribunal in its judgment dated 25.04.2013 in Appeal No. 24 of 2013 has in principle issued certain directions to the Gujarat State Commission. The petitioners have prayed that similar directions may be issued to all the State Commissions for compliance."
(3.) MINISTRY of New and Renewable Energy ("MNRE"), Government of India in their submissions stated that development of renewable energy largely hinges on the regulatory framework that has been created under the Electricity Act, 2003 and emanating policies. It is further stated that the MNRE had undertaken an in -house study to examine RPO compliance level. The analysis revealed that on all India basis, the distribution companies have made a provision only upto 75% of RPO requirement for the year 2012 -13. For the year 2013 -14, the provision was made for meeting upto 51% of the RPO requirement. As per the available information, only a few State Commissions have invoked penal provisions available in RPO Regulations that provide for directing the obligated entities to deposit in a separate fund an amount that is determined on the basis of shortfall in RPOs and the forbearance price of REC decided by the Central Commission, to be utilised for purchase of REC and development of transmission system for evacuation of power from the renewable energy projects. Most State Commissions are not seeking RPO compliance report as provided under RPO Regulations and have not announced long term progressively increasing RPO trajectories. It is evident that the obligated entities are ignoring the requirement of RPO compliance since there is no indication of enforcement of penal provisions. This is resulting in slow growth of renewable energy generation. MNRE has supported the prayer of the petitioners and requested this Tribunal to direct the State Commissions to ensure compliance of RPO through timely monitoring and invoking of penal provisions for non -compliance and also direct them not to permit carry forward and waiver of RPO in the event of availability of RECs in the market.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.