APTEL Overturns KERC’s Order On Slashing Solar Park Tariff

APTEL Overturns KERC's Order On Slashing Solar Park Tariff

The Appellate Tribunal for Electricity (APTEL) has overturned a ruling of the KERC that slashed the tariff for a 20-megawatt (MW) solar project in Karnataka. The latest order relieved the petitioner in the case, Tungabhadra Solar Parks Pvt Ltd, which approached the apex power regulator for its intervention.

APTEL ruled that the Karnataka Electricity Regulatory Commission (KERC) had made “uncalled for” and “erroneous” observations when it backed a decision by Gulbarga Electricity Supply Company (GESCOM) to cut the project’s tariff from ₹5.46 per kilowatt-hour to ₹4.36/kWh.

Case Details 

The dispute centered on whether the project was commissioned within the time limit defined in its power purchase agreement (PPA). The tribunal found that the project met the deadline and that KERC had overstepped by accepting a tariff reduction without properly hearing the parties involved.

The tribunal also noted that KERC’s decision was based on an earlier order that had already been set aside by APTEL in 2019, a ruling later upheld by India’s Supreme Court in 2021.

“Reduction of tariff is only allowed for delay beyond the scheduled commissioning date,” the tribunal said in its ruling dated May 16. It also criticized the regulator for making findings on commissioning delays even though the issue was not part of the original dispute.

The 2018 KERC Order

The case arose from a 2018 KERC order that denied Tungabhadra Solar an extension for completing preliminary requirements and upheld GESCOM’s ₹1.2 million penalty for delays. The company said confusion over the PPA’s effective date led to the delay, but a supplementary agreement later clarified the project’s timelines.

KERC also questioned whether the plant had injected power into the grid by its commissioning date and upheld the tariff cut based on weather-related site inspection records.

Findings Rejected 

APTEL rejected those findings and set aside paragraph 10 of the KERC order, which had formed the basis of the reduced tariff. While the penalty amount has already been adjusted and is no longer contested, the tribunal allowed Tungabhadra Solar to file a fresh petition before KERC to claim the shortfall in tariff.

KERC has been directed to decide on the new petition within four months, based on APTEL’s 2019 ruling and the Supreme Court’s 2021 judgment. The outcome is expected to have implications for other solar projects where delays in regulatory approvals have triggered tariff disputes and penalties.