APTEL Upholds KERC Order Slashing Tariffs for Delayed Rooftop Solar Projects

The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by solar project developers challenging a Karnataka Electricity Regulatory Commission (KERC) order that reduced tariffs for delayed rooftop solar projects.

The case, involved developers of rooftop solar projects who contested KERC’s November 7, 2017 order lowering tariffs for projects that failed to meet commissioning deadlines.

Reduction In Tariffs 

The developers argued that the regulator had sharply reduced tariffs from Rs. 9.56 per unit without following procedures laid out under the Electricity Act, 2003. They claimed the decision violated provisions under Sections 64 and 86(3) of the Act and breached principles of natural justice because affected parties were not given an opportunity to present their views.

They also challenged the Commission’s decision to link the tariff to the Average Pooled Purchased Cost (APPC), arguing that it had no legal basis and ran contrary to the renewable energy promotion mandate under Section 86(e) of the Act.

The developers further contended that termination of their original power purchase agreements (PPAs) by Bangalore Electricity Supply Company Limited (BESCOM) was unjustified, as the utility had earlier granted a one-year extension for project commissioning.

Failed Timelines

KERC and BESCOM maintained that the projects had failed to meet the stipulated 180-day commissioning timeline under the original approvals. The regulator argued it had the authority under the Electricity Act to regulate tariffs and procurement, and said the 2017 order was intended to provide relief to developers by allowing them to commission projects at a lower tariff rather than losing them entirely.

APTEL, however, upheld the Commission’s decision and dismissed the appeal. The tribunal noted that the developers had not separately challenged the termination of their PPAs. As a result, even if the 2017 order had been set aside, the original contracts would still remain terminated.

The tribunal also held that the order was not a fresh tariff determination but a remedial measure aimed at salvaging delayed projects where developers had already invested significant funds.

APTEL Supports KERC Order

According to APTEL, the order effectively offered developers a concession by enabling them to supply power to distribution companies at a reduced tariff instead of losing the projects altogether.

The tribunal further observed that the developers had already signed fresh PPAs at the revised tariff in December 2017 and had sought project synchronisation at those rates, which weakened their legal challenge.

With these findings, APTEL concluded that the appeal lacked merit and upheld KERC’s order.