Solar Developers, Telangana Discom Dispute Referred Back to State Regulator By APTEL

In a dispute involving policy and payments for power injected into the transmission system by Solar power developers in Telangana, APTEL has taken the considered view that the State Power Regulator should reconsider its earlier decision and order on the issue, to ensure clarity in the order and for the long term. Urging the state regulator to settle the matter in two months, APTEL highlighted that the issue cannot be allowed to ‘fester’ for too long.

The issue involving multiple solar power developers in the state is broadly this. Three solar power developers in the state had knocked at the state regulator’s doors, after the discom, Southern Power Distribution Company of Telangana Limited declined to meet their demands for treating power injected into the system as banked power.

Take the example of one of the SPPD’s that had achieved the commercial operation on 07.06.2016 and had been granted a certificate of completion on 29.10.2016. It appears, it had applied for the grant of Long-Term Open Access (LTOA) to the STU (Transco) on 14.03.2017, it having already synchronized its systems with those of the Discom (appellant) on 07.10.2016. The application for LTOA was made over by the Transco unto the appellant (Discom) on 14.03.2017. Eventually, the intra-state LTOA was granted on 06.04.2017 leading to execution of LTOA agreement on 19.04.2017 for period from 20.04.2017 to 20.11.2026.

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The key prayer of the SPPD was for the units fed into the grid by the solar power plant from the date of synchronization to the date of LTOA agreement be deemed to have been banked or, in the alternative, for a direction to the Discom to pay for the said electricity injected @ Rs.6.78 per unit.

Both the state Transco and the Discom contested this, claiming that the supply injected into the system of the Discom before the grant of LTOA was inadvertent power, there being no liability cast on the said entities to pay compensation there against. At the state regulator hearing, question arose as to whether such claims could be so pressed on the basis of State policy, there being concededly no express provision in the extant regulations governing the subject, it being questioned if the third amendment to the Interim Balancing and Settlement Code for Open Access Transactions Regulation No. 2 of 2006, brought about by regulation 1 of 2017 published in the official gazette on 25.03.2017, could be given retrospective effect.

The Commission took note of the objections (in para no.38 of the impugned order), holding that such amended regulation was to be applied prospectively and yet proceeded to observe that there was a legitimate expectation created in the form of government policy on the subject, the licensee having abdicated its responsibility of enlightening the generator in that regard.

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But then the relief was granted to each generator by the impugned original order dated 02.01.2019 on the ground that there had been inordinate unexplained delay in grant of LTOA, the timelines set out in the relevant regulation i.e. Andhra Pradesh Electricity Regulatory Commission (Terms and Conditions of Open Access) Regulation, 2005, having not been adhered to. On such reasoning, the State Commission held that the SPPDs are entitled to banking of energy injected from the date on which the LTOA ought to have been granted.

An appeal by the discom against this order was dismissed on grounds of delayed appeal.

APTEL, in its order found that  the State Commission has not examined the question as to who was responsible for the delay in grant of LTOA within the prescribed period and if such delay is attributable to Transco (third respondent) as to whether the burden can be shifted on to the appellant (Discom) for it to suffer the relief in the nature which have been granted. In addition to that, it expressed dissatisfaction with the way the issue of retrospective application of the third amendment of 2017 to the relevant regulations has been glossed over, the observation that it was the responsibility of the licensee to enlighten the generator in that regard being unfounded.

Thus, it arrived at the decision to send the case back to the state regulator, with the assent of all the parties involved.