RERC Orders Compensation To Wind Firms For Bird Diverter Costs

RERC Orders Compensation To Wind Firms For Bird Diverter Costs

The Rajasthan Electricity Regulatory Commission (RERC) has ruled that wind energy companies are entitled to compensation for the mandatory installation of bird diverters to protect the endangered Great Indian Bustard, classifying the expense as a “Change in Law” under their power contracts.

The Rajasthan Electricity Regulatory Commission (RERC) issued the order in response to petitions filed by four wind energy firms, including Ratedi Wind Power and Tanot Wind Power Ventures. The developers said they were compelled to install diverters following Supreme Court orders aimed at conserving the bird species, incurring costs not covered under existing Power Purchase Agreements (PPAs).

Discoms Against Compensation

The state-run Rajasthan Urja Vikas Nigam Ltd (RUVNL) and three regional distribution companies opposed the claim, arguing the rules cited by the developers do not apply retroactively and the diverters were installed voluntarily in “potential” rather than “priority” GIB zones.

RERC rejected these arguments, stating that Supreme Court orders from April 2021 and April 2022 had binding legal force and applied to both priority and potential areas. The Commission said the expense qualifies as a Change in Law event under Article 12 of the PPAs, as well as under the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021.

Entitled For Carrying Cost: RERC

“The financial impact on the petitioners must be addressed,” the Commission ruled, adding that judicial orders are a valid source of law under contractual frameworks. RERC said the developers are also entitled to carrying costs from the time of expenditure until the date of the order.

The regulator ordered the parties to reconcile the costs incurred between April 2021 and March 2024, supported by invoices and audited statements. A discount rate of 9 percent and an annuity period of 15 years—or the remaining PPA term, whichever is shorter—will apply.

Monthly annuity payments must begin within 60 days of the ruling or the date of cost reconciliation, the Commission said.

RUVNL has been directed to reimburse the Solar Energy Corporation of India (SECI) or RUVITL, which acted as intermediaries in the power purchase process.

The ruling could have broader implications for renewable energy projects in India, where developers have faced increasing regulatory and environmental compliance obligations.