1. business and industrial
2. energy
3. electricity

Bihar Electricity Regulatory Commission
Vidyut Bhawan-II, Bailey Road, Patna -800 021
Case No. 4/2015, 7/2015, 8/2015, 9/2015 & 15/2015
In the matter of:
Petition for seeking Project Specific Extension of period of
commissioning in the PPA and also the control period for its Solar PV
projects under BERC order in petition no. 12 of 2012 dated 29th May,
2012
And
In the matter of:
1. Hindustan Clean Energy Limited and Sunmark Energy Projects Ltd.
2. M/s Sri Avantika Contractors (I) Ltd
3. M/s Response Renewable Energy Ltd
4. M/s Glatt Solutions Pvt. Ltd.
5. M/s Alex Green Energy Pvt. Ltd.
..………… Petitioners
Vs.
Bihar State Power Holding Company Ltd.
Quorum:
1. Sri U. N. Panjiar
2. Sri S. C. Jha
…………..Respondent
-
Chairman
-
Member
Appearance:
1
2
Shri Manish Shakya (AEE)
Miss Pragati Trivedi (AEE) (Inter-State)
On behalf of Bihar State
Power Holding Company
Ltd.
On behalf of Hindustan
(Regulatory Clean energy Limited
3
4
5
6
7
8
Shri Pankaj Prakash, AVP
Sri Ashis Nandan, Manager
Affairs)
Shri Alok Kumar Ghai (Adviser)
Shri Pratosh Kumar AVP
Shri Alok Kumar Ghai (Adviser)
Shri Rishi Jaiswal
9
10
Sri Dewaki Nandan Pandey (Project Engineer)
Sri Vijay Varma (Advisor)
1
On behalf of M/s Sunmark
Energy projects Ltd.
On behalf of
M/s Alex
Green On behalf of Energy
Pvt. Ltd.
On behalf of
M/s Sri
Avantika Contractors (I)
Ltd.
11
Sri Sant Prasad, (General Engineer)
12
Sri Suraj Kumar (Management Trainee)
On behalf of M/s Response
Renewable Energy Ltd
On behalf of
M/s Glatt
Solutions Private Ltd.
Date of hearing: 26.02.2015 & 17.03.2015
ORDER
Date : 6th May, 2015
M/s Hindustan Clean energy Limited, New Delhi and M/s Sunmark
Energy Projects Limited, New Delhi (co-petitioner) have filed jointly petition
seeking project specific extension of period of Commissioning in the PPA signed
with Bihar State Power (Holding) Company Ltd. from 24 months to 30 months
and also the control period specified in the order dated 29th May, 2012 of the
Bihar Electricity Regulatory Commission (hereinafter referred as 'Commission')
in Case No. 12/2012 by 6 months. Commission registered the Case No.4/2015
dated 9.02.2015 and initiated hearing process. In the meanwhile, similar
petitions were filed by other Solar PV power developers namely M/s Sri Avantika
Contractors (I) Ltd, M/s Response Renewable Energy Ltd, M/s Glatt Solutions
Pvt. Ltd and M/s Apex Green Energy Ltd also and the Commission registered
the case nos.07/2015,08/2015,9/2015 and15/2015 respectively. These project
developers have also prayed for extension of period of commissioning from 24
months stipulated in the PPA signed with BSPHCL to 30 months and control
period on various grounds. Commission heard the petitioners together and a
Common Order is being passed.
2.
Chronology of the petitions and hearing
2.1
Commission heard the matter on 26.02.2015. The petitioners have
prayed for project specific extension of the contract period in respect of the
Tariff order dated 29.05.2012 in the petition no.12 of 2012 on account of delay
caused by factors beyond the control of the petitioners.
2.2
The notice was issued to BSPHCL with a copy of the petition filed by
the petitioner but no parawise reply has been submitted by BSPHCL. Chief
Engineer, Transmission (O&M) has submitted a reply vide letter no.17 dated
20.02.2015 in which it has been stated that direction of the Commission is
2
solicited for extension of time line from 24 months to 30 months in case of Solar
PV project developers with whom PPA were executed up to 31.03.2013. The
control period and COD were going to expire on 31.03.2015.
2.3
Similar petitions have been filed by the following project developers on
different grounds:(1)
M/s Sri Avantika Contractors (I) Ltd.
(2)
M/s Response Renewable Energy Ltd.
(3)
M/s Glatt Solutions Pvt. Ltd.
Their petitions have been registered as case nos. 7/2015, 8/2015 and 9/2015
respectively. The above project developers have also prayed for relief similar to
the relief sought by Hindustan Clean Energy Ltd. Therefore, the commission
has decided that the petition of the other project developers will be heard along
with the case of M/s Hindustan Clean Energy Ltd. The representative of M/s
Alex Green Energy Pvt. Ltd. has also filed petition on the same issue and prayed
for initiation of case for hearing. The Commission directed to register the case
for hearing jointly along with other similar petitions.
2.4
NBPDCL and SBPDCL prayed to grant 15 days time to file reply and
also prayed to make available copies of the petitions filed by the project
developers. The Commission allowed the prayer and directed to serve copies of
petitions filed by the petitioners to the SBPDCL and NBPDCL. Matter was put
up for hearing on 17.03.2015. Representative of BSPHCL submitted that reply
will be submitted within 7 days. NBPDCL and SBPDCL informed that as the
reply will be filed by BSPHCL, they need not file separate reply. The
representatives of the petitioners submitted that copies of the reply of BSPHCL
should be provided to them also to enable them to file a rejoinder if any.
2.5
Commission directed the representative of BSPHCL to submit reply
before the Commission with a copy to all the petitioners within a week. They
were also directed to submit a report whether PPAs have been signed with other
generators for supply of Solar Power to BSPHCL and if so at what levelised
tariff.
Order was reserved.
3
2.6
BSPHCL submitted its comments/suggestions dated 18.04.2015 on
20.04.2015.
3.
Submission of the petitioners:
The submission of petitioners seeking project Specific Extension of
COD in the PPA and also the Control Period for their Solar PV projects under
BERC Order in Petition no.12 of 2012 dated 29.5.2012 are as follows:3.1
Case No. 04/2015:
Submission of Hindustan Clean Energy Limited (formerly MBCEL)
and Sunmark Energy Ltd. (co-petitioner):
3.1.1
The petitioner Hindustan Clean Energy Limited (erstwhile 'Moser Bear
Clean Energy Limited) had applied for approval of State Investment Promotion
Board (SIPB) for executing 4 solar PV Projects in the State of Bihar through its 4
subsidiary Special Purpose Vehicles (SPVs) (one of them being the co-petitioner),
SIPB granted its approval to Moser Bear Clean Energy Limited for 4 projects
totalling 86 MW on 03.11.2011. Subsequently, a Power Purchase Agreement
(PPA) was signed between Moser Bear Clean Energy Limited and Bihar State
Power (Holding) Company Limited (BSPHCL) on 14.03.2013 for setting up 10
MW Solar Power Project at Village Barajwa, Block Ram Nagar, District West
Champaran.
3.1.2
After signing of the PPA on 13.05.2013, Petitioner sought following two
permissions from SIPB (with copies to Energy Department, BREDA and
BSPHCL), which were critical pre-requisites for further approvals, financial
closure and execution of the project:
a) The PPA and State NRES Policy required the commissioning of the
project to be completed in 24 months from date of the Policy or SIPB
approval whichever is later. Since in our case, SIPB approval came
later i.e. on 03.11.2011, we were left with only about 7 months time for
completion of the project after signing of PPA in March, 2013.
Obviously, the same was not practical and, hence, was a non-starter in
4
the absence of clarity on commissioning period. A clarification was,
thus, sought on this issue from SIPB, which clarified the matter
through its letter dated 11.07.2013.
b) Simultaneously, in order to avail financing and other approvals, it was
necessary that in line with our original proposal, we were permitted to
develop the project through the SPV of the parent company (MBCEL)
with which PPA was signed. Accordingly, we sought permission for the
same from SIPB. This approval was granted by SIPB on 07.08.2013
vide their letter no.1462.
3.1.2
Petitioner has further submitted that during the pendency of the
approvals as above, they came to know that there has been marked shift in
solar radiation levels at different locations in the State as per the latest
published data of Meteonorm. In particular, for our site mentioned in the PPA,
the radiation fell drastically. Since radiation is, so to say, raw material for
electricity in solar projects, such drastic reduction not only rendered the project
unviable but also meant lower availability of power to the State. Accordingly, on
07.10.2013 the petitioner applied for change in location from West Champaran
to a new site with better radiation level (presently proposed site is Sherghati,
Gaya District) to the Secretary, Energy, Govt. of Bihar (with copies to Industry
Department, BREDA and BSPHCL) and separately to SIPB on 08.10.2013.
3.1.4
Commission may appreciate that the change of name from parent
company to SPV and change of location are required to be incorporated in the
PPA for various permissions like connectivity, pollution control etc. as well as
for entering into back to back binding contracts with external parties including
financial institutions. Accordingly, petitioner requested Respondent (BSPHCL) to
amend the PPA i.e. to execute the project by 100% owned subsidiary of
erstwhile Moser Bear Clean Energy Limited (now known as Hindustan Clean
Energy Limited) i.e erstwhile Moser Bear Energy & Projects Limited (now known
as Sunmark Energy Projects Limited). On 06.01.2014, Petitioner requested
5
Respondent (BSPHCL) to allow petitioner to amend the PPA also, with a parallel
submission to Secretary, Energy, Govt. of Bihar as well as to Director, BREDA.
3.1.5
Further, on 07.07.2014, again on verbal request from Respondent
(BSPHBCL), we resubmitted complete details and documents related to
shareholding pattern, which had already been submitted. In the meanwhile,
since the names of both petitioner and Co-petitioner companies were changed
the same were requested simultaneously to BSPHCL for incorporation. The
name of the petitioner (parent company) changed from Moser Baer Clean
Energy Limited to Hindustan Clean Energy Limited and the Co-petitioner (the
subsidiary SPV) from Moser Baer Energy & Projects Limited to Sunmark Energy
Projects Limited. Thereafter, petitioner again followed up and re-iterated its
request to SIPB, Department of Energy, Department of Industry to accept
petitioner's request and allow petitioner to sign the PPA on 10.07.2014,
17.07.2014 and 09.09.2014.
3.1.6
The petitioner finally got the approval of Respondent to sign the PPA
with changed location and 100% owned SPV only on 10.11.2014. Copy of the
Respondent's letter (vide Letter No.1685/27/Misc-TGr O&M-IS-117/2013 dated
10-11-2014) approving the change in location, change in name of parent
company and SPV as well as for signing of the PPA with M/s Sunmark Energy
Projects Limited .
3.1.7
However, prior to signing of the PPA, the petitioner has been asked by
Respondent to submit the approval of Pollution Control Board and SIPB on all
the issues mentioned in above para. Accordingly, petitioner again approached
SIPB on 11.11.2014 to accept Petitioner's request for Change of Location.
Simultaneously, Petitioner also approached Chief Engineer, Transmission,
BSPTCL on 11.11.2014 for Transmission and Evacuation permission and to
Member Secretary, BSPCB on 14.11.2014 for Consent to Establish the project.
The Consent to Establish has been obtained from Pollution Control Board only
on 06.01.2015, whereas SIPB approval and evacuation permission are still
awaited.
6
3.1.8
The petitioner has submitted that in the whole process of running from
pillar to post for requisite approval, petitioner has lost considerable amount of
time, i.e. about 17 Months and has still to get all the requested approvals and
permissions. The execution can take off only after such approvals are
incorporated in the PPA. Petitioner could never envisage that this would take so
long as in other States, the PPAs are amended for location change as a routine
matter in about a month's time. The petitioner submits that it has been in
touch with the concerned officials almost on daily basis at Energy Department,
Industry Department (GoB), BSPHCL, BSPTCL, BREDA and other related
departments and for that Petitioner has dedicatedly posted one of its officers in
Patna, along with a Consultant so that the execution of the project could start
and the project gets commissioned at the earliest. However, important requisite
approvals, including SIPB approval for change of location and name, are still
awaited.
3.1.9
Further, the clause 4.2.3 of the State NRES Policy states that;
4.2.3 The capital cost of transmission system for evacuation
of power to the nearest grid/sub-station including all
metering & protective instruments shall be born by BSEB,
which
shall
be
reimbursed
to
BSEF
by
the
State
Government, provided that the project developer offer to
supply BSEB/Distribution Licensee at least 50%, subject to
a minimum of 2 MW, of power generated from New and
Renewable Energy Projects. Else the entire project cost of
transmission system for evacuation of power to the nearest
grid/sub-station
including
all
metering
&
protective
instruments shall be born by the project developer.
3.1.10
The Commission in respect of interpretation of clause 4.2.3 of the
State NRES Policy, issued an advisory on 10.09.2014 to BSPHCL (Respondent)
for clarity on whether Project Developer has to build the transmission facility or
BSPHCL will build it, wherein, Commission advised the Respondent that the
amount of supply of electricity to the Distribution Licensee shall be based on
7
the approved CUF percentage and thus the provision of supply of 50% of power
subject to a minimum of 2 MW as per NRES Policy will be complied in case of
the petitioner. Therefore, the evacuation/transmission line has to be provided
by the Respondent.
3.1.11
The petitioners have further submitted that even after issuance of the
statutory advice from Commission, the Respondent (BSPHCL) has not given any
clarity to the petitioner on whether petitioner (Project Developer) has to build
the transmission facility or BSPHCL will build it.
3.1.12
In the meantime, the petitioner has also been making all out efforts for
debt/funding of the project from various banks/financial institutions. It is
pertinent to mention that apart from the above issues, all the other solar power
project developers are facing a challenge on financing of the projects. In this
regard, the petitioner had approached the Respondent on 10.07.2014 with a
request to write favourable words to various financial institutions so that
Petitioner could do financial closure. It is submitted that the Chairman of the
Respondent Company (BSPHCL) was kind enough to write to various financial
institutions to finance the projects in Bihar. However, nothing could materialize
in Petitioner's case due to delay in signing of the amended PPA.
3.1.13
It is submitted that as per para 1.8.1 of PPA dated 14.03.2014, the
project developers had to adhere to and achieve the activity milestones within
the time period as defined under clause 4.4.1 of "Bihar Policy for promotion of
New and Renewable Energy Sources 2011" or as amended time to time. Further
under para 1.8.1 and 9.1.1 of PPA and para 4.4.3 of the State NRES Policy,
State Investment Promotion Board (SIPB) has been empowered to extend the
time schedule for commissioning and provide new time schedule for the project
for sufficient reasons advanced by the project developer. The petitioner, thus,
requested SIPB (with a copy to Department of Energy, GoB and BSPHCL) on
13.01.2015 to extend the timeline by six months citing the aforesaid reasons,
i.e. from 31.03.2015 to 30.09.2015. In the said request letter the petitioner also
requested SIPB to approve the new location at Sherghati, District Gaya for its
projects, change of name of parent company & SPV and accordingly, issue the
8
letter for the same to the Petitioner so that amended PPA may be signed and
further action can be taken as per the agreed terms of the PPA. A formal
approval of SIPB/GoB/BSPHCL for grant of extension, change of name and
location is still awaited. Notwithstanding the decision of these authorities,
granting or rejecting the approvals requested, Commission is vested with the
power to adjudicate upon disputes between the generating company and
licensee under section 86 of the Electricity Act, 2003 and Regulation 28 of its
Conduct of Business Regulations. In view of the genuine difficulties/challenges
faced by the petitioner in executing this prestigious 10 MW Solar PV project in
the State of Bihar, the petitioner was left with no option but to move to the
Commission with present petition for grant of six months' time extension to
commission for its project by extending the time for commissioning given in the
PPA and also the control period for the tariff given in the PPA by same duration
of six months.
3.1.14
It is submitted that the Petitioner is only seeking a relaxation/
extension of the control period and period of commissioning by the Commission
in exercise of its inherent powers and in the interest of justice due to genuine
difficulties faced by it which were beyond its control. In this regard, in a similar
matter Appellate Tribunal of Electricity in Appeal Nos. 96 and 130 of 2012 has
held in its judgment dated 02.01.2013 that:
"25........
Again extension of control period cannot by any stretch of
imagination would amount to amendment of the Tariff
Order. Amendment of the Tariff Order by virtue of section
62 (4) of the Electricity Act, 2003 was not prayed for. Since
in every venture there is allocation of risk, it cannot be
said that even if a certain developer experiences hurdles
beyond his control, he has to abide by such hurdles. When
fact in each case is hotly contested by a counter fact or
denial, justice demands that each fact has to be
separately dealt with and decided. It is the Commission
9
which is alone competent to scrutinise the merits and
demerits of each fact in each of the two Appeals. It is the
Commission that has the infrastructure and capability to
examine and find as to whether expenditures were made
committed ahead of the date of commissioning of the
project so that no unfair advantage is claimed by any
developer on the ground of
prospective reduction of the
capital cost. If the particulars of expenditure if already
made
or
committed
during
the
control
period
are
scrutinized and the grounds are scrutinized in the
perspective of each individual case then possibly it would
be clear to the Commission as to whether and in which
case a developer comes with clean hands or not.
26. In the result, it is of absolute necessity that the
Commission needs to examine the case of each of the two
appellants in their respective merits and decide afresh.
The basic premise that extension of control period is
possible only when there are wide scale ramifications is
pregnant with flaws."
3.1.15
Post the above decision, GERC vide its Order dated 05.04.2014 in
Petition No.1188 of 2012 has extended the Control Period for applicability of
tariff of Rs.15/unit for Solar PV Power Project of M/s Solar Semiconductor
Power Company (India) Private Limited.
3.1.16
It is further submitted that Commission may kindly appreciate that in
spite of best efforts put in by the Petitioner the execution of the Project has been
delayed due to reasons beyond the control of the Petitioner which cannot be
attributable to the Petitioner. Further, even if the amended PPA is signed now,
there will be hardly any time left for completion of the project within stipulated
timeline. However, given the already completed ground works and with the vast
experience of the parent company of the Petitioner in executing solar projects,
Petitioner is confident to commission the project within 6-8 months from
10
signing of the PPA. Therefore, the Petitioner humbly requests Commission to
extend the timeline of 24 Months to 30 Months for execution and by 6 months
for applicability of tariff in the Control Period fixed in Order dated 29.05.2012
(i.e. from 31.03.2015 to 30.09.2015) for its 10MW Solar PV Power Project to be
set up in the State of Bihar as a special case.
3.1.17
In view of the submissions made above, the Petitioner/Co-Petitioner
has prayed(i) To extend the period of commissioning under the PPA up to
30.09.2015 and the Control Period for Petitioner's Solar PV Power
Project by 6 months (i.e. from 31.03.2015 to 30.09.2015).
(ii) To pass any other order as deemed appropriate in the interest of
justice.
3.2.
Comments/objections of BSPHCL
BSPHCL has submitted following comments/objections vide letter no.
27 dated 18.4.2015 :1. BSPHCL had executed Power Purchase Agreement (PPA) with four (4)
Solar PV Developers based on the recommendation of the Energy
Department, GOB letter no.456 dated 24.01.2013 after taking legal
opinion of the Additional Advocate General, Bihar.
2. In addition to the above, erstwhile BSEB [now BSP (H) CL] had also
executed PPA with M/s Glatt Solutions Pvt. Ltd., Kolkata for supply of
power from 3 MW Solar PV Generation Project.
3. Further, in addition to the above, BSP (H) CL has also executed PPA with
Solar Power Corporation of India, Government of India for supply of 10
MW Power from Solar
PV Projects at tariff Rs.5.50/Kwh for 25 years
under JNNSM Batch-II, Phase-I, which is as follow;
Under JNNSM Scheme at tariff Rs.5.50/Kwh for 25 years
Solar
Energy 10
Corporation of India
Ltd., Government of
India
Expected
on PPA executed
28.04.2015
11
4. The details of the PPA executed so far with Solar PV Project developers as
per Energy Department, Government of Bihar letter no.456 dated
24.01.2013 based on tariff determined by BERC for 2012-13 are as follow;
Name
of
the Quantum
Developers
"MW"
Hindustan
Clean
10
Energy Ltd. and
Sunmark
Energy
Projects Ltd. (Copetitioner)
M/s
Response
10
renewable
Energy
Ltd., Kolkata
M/s
Alex
Green
10
Energy Pvt. Ltd.,
Kolkata
M/s
Avantika
5
Contractors
Ltd.,
Hyderabad
M/s Glatt Solutions
3
Pvt. Ltd., Kolkata
Total
38
Schedule COD
31.03.2015
Applicable Tariff
Based
on the tariff
determined by BERC
for tariff period 201213 in Petition no.12 of
31.03.2015
2012 vide order dated
29.05.2012
31.03.2015
Levelised
Tariff
Rs.10.90/Kwh
31.03.2015
31.03.2015
It is further mentioned that the tariff determined by BERC for tariff period
FY2012-13 is based on the capital cost of Rs.10 Crores/MW.
The Generic levelised tariff determined by BERC for 2012-13 is on the
basis of above capital cost and technology specific parameters for solar PV
Projects. The tariff is applicable for such Solar PV projects which are
commissioned during the control period i.e. up to 31.03.2015 and for
which PPA is signed up to 31.03.2013. The tariff shall be valid for a tariff
period of 25 years from the commercial operation date (CoD).
5. It is also relevant to mention that the capital cost of the Solar PV project
is reducing each year resulting substantial decrease in the Solar PV tariff.
In this regard, tariff of the Solar PV determined by CERC (without
12
accelerated depreciation) for the period 2012-13 to 2015-16 are as
follows:Tariff period
Tariff Approved
Rs./ Kwh
Capital
cost
Approved Rs. Crores/
MW
2012-13
10.39
10
2013-14
8.75
8
2014-15
7.72
6.91
2015-16
under process
5.87
BERC has fixed similar tariff for Solar PV projects as indicated in the
table above for the period 2012-13 & 2013-14. Tariff for FY 2014-15 for
Solar PV project is under process.
6. The delay caused in the execution of the project is primarily due to the
reasons attributable to the solar developer. Solar Developers were selected
by the Energy Department, Government of Bihar through a committee
formed for evaluation of the proposal of the SIPB approved Solar PV
projects. The recommendation of BREDA, SIPB, BSPCB & Energy
Department was obtained by the petitioner in the name of Moser Bear
Clean Energy Limited for place at Village Bargajwa, Ramnagar, West
Champaran.
7. PPA with the petitioner was also executed on 14.03.2013 for place and
name as recommended by the Energy Department, Government of Bihar
letter no.456 dated 24.01.2013. There was no reference in the Energy
Department, Government of Bihar letter no.456 dated 24.01.2013 of the
SPV or Change in location allowed for the Solar Project in the above said
letter of the Energy Department.
8. Therefore, it was essential to inform Energy Department, Government of
Bihar and seek approval on the request of the petitioner for change in
name of the Company and location as well as SIPB & BSPCB approval for
13
change in name & location from Beargajwa, Ramnagar, West Champaran
to Sherghati, Gaya.
9. Based on the advice of the Law Department communicated by the Energy
Department, Government of Bihar, the petitioner was asked to sign fresh
PPA after submitting the relevant documents.
10. For the exploitation of the solar potential in Bihar it has contracted with
five (5) Solar PV developers through competitive bidding process for
implementation of 100 MW Solar PV based generation projects in Bihar
and supply power to the DISCOMs. BSP(H)CL intend for addition of
another 150 MW Solar PV based generation projects in Bihar through
competitive bidding process.
11. It is imperative to mention that BSP (H) CL has recently executed PPA
with five (5) Solar PV project developer at tariff obtained through
competitive bidding process based
on book building process for
implementation of 100 MW Solar PV based generation project in Bihar,
which are as follow;
100 MW Solar PV through Competitive Bidding Process
Name of the Bidder
Quantum
Offered "MW"
Alfa Infraprop Pvt. Ltd.
20
Udipta
Energy
&
Equipment Pvt. Ltd.
Azure Power India Pvt. Ltd.
Quoted
Remarks
Tariff
"Paisa/kWh"
787
PPA Executed
5
798
PPA Executed
10
839
PPA Executed
Welspum
Renewables
Project-I
Welspum
Renewables
Project-II
Welspum
Renewables
Project-III
Acme Cleantech Project-II
15
856
PPA Executed
15
864
PPA Executed
10
870
PPA Executed
15
873
PPA Executed
Acme Cleantech Project-III
15
873
PPA Executed
Total-
100
14
12. The capital cost & cost of tariff of the Solar PV projects are reducing
consistently each year. Therefore, bidders who defaulted the deadline of
commissioning schedule (i.e. 31.03.2015) of Solar PV projects may not be
awarded time extension at the same tariff i.e. Rs.10.90/Kwh. otherwise it
will have serious audit implication for NBPDCL & SBPDCL as the tariff
obtained from the bidding process for 100 MW Solar PV had yielded lower
tariff discovery.
13. Therefore, the bidders with whom PPA was executed based on the tariff
(Rs. 10.90/kWh) for gross capacity of 38 MW may not be allowed time
extension beyond 31.03.2015 for commissioning of the Solar PV Projects
at the same tariff (i.e. Rs.10.90/kWh).
14. In view of the decline in the capital cost & tariff every year and keeping in
view the PPA executed with Solar Energy Corporation of India (SECI),
Government of India for long term (25 years) for supply of solar power at
tariff Rs.5.50/kWh under JNNSM Scheme Phase-I, Batch-II and 100 MW
power contracted through bidding process at rate indicated in the table
above under para 11.0, it will be financially unviable for NBPDCL &
SBPDCL to procure Solar power at higher tariff ( i.e. Rs.10.90/kWh) in
the light of the Solar PV power is available at lower price in the market.
BSP (H) CL is therefore, not against the extension of the Schedule
Commercial operation date of the Solar PV Projects but BSP (H) CL only
oppose that such extension to the Solar developers mentioned in the table
above under Para 3 would not be at the same tariff (i.e. Rs.10.90/kWh)
owing to the reasons explained above.
15. Solar Developers with whom PPA was executed prior to 31st March 2013,
in spite of the availability of the substantial time none of the solar
Developers able to comply the commissioning schedule dated 31st March,
2015 under clause 20.0 of the Commission order dated 29th May 2012 in
Petition no.12 of 2012 on the pretext of the reasons explained above to
deliberately delay the project to take advantage of the decrease in the
15
capital cost of Solar PV Project & earn maximum profit by virtue of the
higher PPA tariff i.e. Rs.10.90/kWh.
16. Petitioner has not obtained approval from SIPB on the change of name of
the SPV and location of plant now at Sherghati, Gaya. NoC from Bihar
State Pollution Control Board is also pending. M/s Hindustan Clean
Energy Limited not yet executed fresh PPA in the name of M/s Sunmark
Energy Projects Limited nor submitted revised CPG consequent upon
change in name of the company for signing fresh PPA despite out letter
no.1685 dated 10th November, 2014 as per direction of the Energy
Department, Government of Bihar.
17. It is submitted in light of the facts and circumstances stated above and
in view of the section 61 (c), (d) & (e) of the EA 2003 & BERC order dated
29th May, 2012 in petition no.12 of 2012 for appropriate justice on the
instant issue in the interest of the people of Bihar and prayed
the
following;
a. Request of the petitioner for Extension of the Schedule Commercial
Operation Date (i.e. 31.03.2015) fixed by the Commission may be
allowed.
b. Tariff (Rs.10.90/kWh) fixed by BERC vide order dated 29th May 2012
in petition no.12 of 2012 for the period 2012-13 should not be allowed
to the petitioner in view of the default by the petitioner in compliance
of the schedule Commercial Operation Date (i.e. 31.03.2015) fixed by
the Commission.
c. Commission should not allow same tariff (Rs.10.90/kWh) in view of
the lesser tariff determined by CERC for the period 2013-14, 2014-15
& approval of lower capital cost for solar PV project mentioned in table
under para 5 above and also keeping in view of the PPA signed with
SECI, Government of India at tariff Rs.5.50/kWh for supply of 10 MW
power for 25 years and PPA executed with Solar PV developers at tariff
mentioned in table above under para 11 for supply of 100 MW power
to Bihar for 25 years through competitive bidding process.
16
d. Or, Commission may pass an order as it deem fit and appropriate in
the instant matter.
3.3
Commission’s analysis, views and findings:-
3.3.1
Petitioner's submission, status report submitted by BREDA and
BSPHCL's comments/suggestions and submissions in course of hearing were
analysed by the Commission and Commission views the following :The petitioners have sought relief under the provisions of Clauses 37,
39 and 40 of BERC (Conduct of Business) Regulations, 2005 and clauses 37
and 38 of BERC (Terms and Conditions for Tariff Determination from Solar
Energy Sources) Regulations, 2010.
Clause 37(1) of BERC (Conduct of Business) Regulations 2005 provides
that–
"Nothing in these Regulations shall be deemed to limit or
otherwise affect the inherent power of the Commission to
make such orders as may be necessary for ends of justice
or to prevent the abuse of the process of the Commission"
Hon'ble APTEL in its order dated 02.01.2013 in Appeal No. 96 of 2012
and 130 of 2012 has also held that the relevant Regulations of the Commission
is identical in language and spirit with section 151 of the CPC.
Therefore, The Commission considers that it has inherent power to pass
any order for ends of justice and to prevent abuse of the process of the
Commission.
Whether this jurisdiction will apply to a particular case will depend on the
facts of each case. Clause 37 of BERC (Terms and Conditions for Tariff
Determination from Solar Energy Sources) Regulations, 2010 provides that the
Commission may by general or special order, for reasons to be recorded in
writing, and after giving an opportunity of hearing to the parties likely to be
affected may relax any of the provisions of these Regulations on its own motion
or on an application made before it by an interested person. These Regulations
have already been amended vide Commission's order dated 14.06.2013 in Suo17
motu proceedings No. 9/2013 in which the generic levelised tariff for solar PV
including rooftop PV projects has been revised to Rs. 7.87 per kWh as net
levelised tariff after adjustment for accelerated depreciation and Rs. 8.75 per
kWh as levelised tariff without adjustment for accelerated depreciation. The
control period for this tariff has already been revised and made applicable for
project for which PPA has been signed for 31.03.2014 and the projects are
commissioned by 31.03.2015. The petitioner has submitted that in spite of best
efforts put in by the Petitioner, the execution of the project has been delayed
due to reasons beyond the control of the Petitioner and which cannot be
attributable to the Petitioner. Further, even if the amended PPA is signed now,
there will be hardly any time left for completion of the project within stipulated
timeline. However, the Petitioner is confident to commission the project within
6-8 months from signing of the PPA. Therefore, the Petitioner has humbly
requested Commission to extend the timeline of 24 Months to 30 Months for
execution and by 6 months for applicability of tariff in the Control Period fixed
in Order dated 29.05.2012 (i.e. from 31.03.2015 to 30.09.2015) for its 10MW
Solar PV Power Project to be set up in the State of Bihar as a special case.
3.3.2
The reasons forwarded by the petitioner for delay in execution of the
project are mainly the following :(1)
The PPA and State NRES Policy required the commissioning of the
project to be completed in 24 months from date of SIPB approval.
Since in the case of the petitioner, SIPB approval came on
03.11.2011 and PPA was signed on 14.03.2013, the petitioner was
left with only 7 months' time for completion of the project which
was not practical and hence was a non-starter. Therefore the
petitioner sought clarification from SIPB which was received on
11.07.2013. SIPB clarified that date of PPA shall be treated as the
date of approval of SIPB.
(2)
In order to avail financing and other approvals, it was necessary
that the petitioners were permitted to develop the project through
18
the SPV of the parent company. Accordingly, the petitioners sought
approval from SIPB which was received on 07.08.2013.
(3)
The petitioner came to know that the solar radiation levels for the
project site was drastically reduced which rendered the project
unviable. Petitioner submitted an application on 07.10.2013
seeking change of location from west Champaran to a site with
better radiation level at Sherghati in Gaya district. Petitioner
requested respondent BSPHCL to amend the PPA incorporating
change of location, change of name etc on 06.01.2014. Petitioner
finally got approval of the respondent to sign the PPA with changed
name & changed location on 10.11.2014 and was asked to submit
approval of SIPB and Bihar state pollution control Board.
(4)
Change of name of the Company and change of location was
required
incorporation
in
the
PPA
for
obtaining
necessary
approvals. Therefore, the petitioner requested respondent BSPHCL
on 06.01.2014 to amend the PPA accordingly.
(5)
The petitioner finally got approval of respondent to sign PPA with
changed location and 100% owned SPV only on 10.11.2014.
(6)
Petitioner approached CE, Transmission, BSPTCL on 11.11.2014
for permission for Transmission and evacuation and on 14.11.2014
for consent to Bihar State Pollution Control Board which was
accorded on 06.01.2015. Petitioner has submitted that SIPB
approval
and
permission
for
evacuation
Commission has received a copy of
are
still
awaited.
consent for extension of COD
up to 30.06.2015 accorded by Energy Deptt. Bihar vide letter no.
676 dated 04.03.2015.
(7)
The Commission issued an advisory on 10.09.2014 on the
interpretation of the clause 4.2.3 of the State NRES Policy of 2011
wherein it has been advised that the amount of supply of electricity
to distribution licensee shall be based on the approved CUF
percentage. Thus the provision of supply of 50% of power subject to
19
minimum of 2MW as per NRES Policy will be complied in case of
the petitioner and therefore the evacuation/transmission line has to
be provided by the respondent.
(8)
The petitioner was making all-out efforts for debt/funding of the
project from banks/financial institutions. However nothing could
materialise due to delay in signing of the amended PPA.
(9)
Since the project was considerably delayed and it was not possible
to complete the project within the time stipulated in the PPA and
State NRE Policy in the Bihar Policy for promotion of New and
Renewable
Energy
Sources
2011,
extension
of
time
for
commissioning of the project was sought from SIPB which is still
awaited.
3.3.3
The Commission has considered various reasons for delay submitted
by the petitioner. The petitioner knew at the time of the signing of the PPA that
only 7 months' time was left for completing the project after signing of the PPA
and they could have done due diligence and taken necessary steps in this
matter before signing the PPA. Similarly the requirement of execution of the
project through SPV could have been envisaged by the petitioner before signing
the PPA. Therefore these reasons for delay are fully attributable to petitioner
and co-petitioner themselves and cannot be said to fall in the category of factors
beyond the control of the petitioner.
3.3.4
When the petitioner signed the PPA they could have done due diligence
to assess the viability of the project on the basis of the solar radiation data of
the site of the project for which PPA was signed. Change of location was
proposed by the petitioner for improving the profitability of the project and
cannot be said to be a factor which is beyond control of the petitioner.
Therefore, this reason for delay is also totally attributable to the petitioners
themselves and does not fall in the category of factor beyond the control of the
petitioner.
20
3.3.5
The petitioner applied for change of location after 7 months of signing
of the PPA. The petitioner got the approval for signing of fresh PPA with changed
location and 100% owned SPV in Nov. 2014. Thus, the petitioner has lost more
than 1 year and 8 months in the entire process which is totally attributable to
the petitioner and nobody else.
3.3.6
The issue of interpretation of clause 4.2.3 of the State NRES Policy
2011 is an exercise which could have been done parallely along with the
erection of the power plant at site. The exercise of seeking interpretation of
clause 4.2.3 of the State Policy regarding funding of the evacuation
infrastructure did not prevent the petitioner in any way from erecting the power
plant.
3.3.7
The petitioner has also raised the issue of funding of project.
Mobilisation of necessary funds for the project is necessarily the responsibility
of the project developer and not so much of the respondent BSPHCL. Still on the
request of the petitioner, respondent BSPHCL has written to various financial
institutions to finance the projects in Bihar. This reason cannot be said to be
beyond the control of the petitioner.
3.3.8
Subsequent to the final hearing in the case, the petitioner has
submitted a letter dated 26.03.2015 with a copy of the Letter of Award to
Hindustan EPC Company issued on 17.06.2014 for Rs. 77 crore for EPC of the
project. Subsequently, the binding EPC contract was signed on 28.08.2014. The
petitioner has also submitted a copy of the letter dated 4.3.2015 of Energy
Deptt., Govt. of Bihar extending the COD of the project.
3.3.9
Perusal of the additional submissions, indicate that consequent upon
EPC contract dated 28.08.2014, a “Notice To Proceed” was to be issued by the
Purchaser to the supplier and project was to be completed on or before
01.3.2015(the scheduled completion date). Payment terms mentioned in the
schedule 3 of the contract indicate that 95% of the offshore supply contract are
to be advanced after signing of agreement. If the supplier has been granted
extension of time or contract has been revised at new terms and what is the
actual status has not been mentioned.
21
The copies of certificate showing an
expenditure of Rs.25.42 Crs. for mobilization advance to EPC made by Sunmark
Energy Projects Ltd and Rs.1.0 Crore for land and other expenses by Hindustan
Clean Energy Ltd was also submitted on 30.03.2015. Petitioner has not
submitted any document nor has claimed that Plant and machinery has
reached the site and activity milestone required to be completed after 18
months as per provisions of Bihar policy, 2011 has been achieved.
EPC contract was signed on 28.08.2014 after a lapse of one year and
six months from the PPA. By this time the Commission had already revised
tariff of solar PV project for FY 2013-14 vide order issued by the Commission on
14.06.2013. Subsequently CERC in its order No. SM 353/2013 dated
15.05.2014 has further reduced the benchmark capital cost for FY 2014-15.
Consequently, the Commission has also issued generic levellised tariff for Solar
PV projects for FY2014-15 at the rate of Rs.7.69/kwh. This tariff shall remain
applicable till a new tariff for FY2015-16 is determined by the Commission. In
the meanwhile, CERC has further reduced the proposed capital cost of Solar PV
projects from Rs.691lakhs/MW in FY2014-15 to Rs.587lakhs/MW forFY201516. The petitioner must have done due diligence to award EPC contract on the
then prevailing market price and not on the price prevailing in March 2013
when PPA was signed at a tariff of Rs. 10.90/kWh and therefore the petitioner
cannot claim the benefit of higher tariff now.
The tariff rate of Rs.10.90/kWh for FY 2012-13 determined by the
Commission in petition no.12/2012 dated 29.5.2012 was based on the capital
cost of Rs.1000Lakhs/MW approved by the CERC.
3.3.10
BREDA, the nodal agency for monitoring all New and Renewable
projects approved by SIPB as provided in Bihar Policy,2011 has submitted a
status report vide letter no.592 dated 15.4.2015. According to this report M/s
Hindustan
Clean
Energy
Ltd
has
acquired
51
acres
of
land
on
12.03.2013,applied for change of location to GOB on 7.10.2013, EPC contractor
was selected on 17.06.2014 and agreement for land was made on 4.08.2014
and PSS has been told to hand over land to GSS for Bay construction on
9.1.2015.
22
The above status report does not indicate that power plant is nearing
completion stage.
3.3.11
The respondent BSPHCL has also submitted its comments/objections
vide letter no. 27 dated 18.4.2015 in petition no. 4 of 2015.
Respondent has submitted that the tariff rate of Rs.10.90/Kwh for
FY2012-13 determined by the Commission in petition no.12/2012 dated
29.5.2012 was based on the approved capital cost of Rs.1000Lakhs/MW by the
CERC. Since the capital cost of solar PV projects has been revised and reduced
every year and accordingly CERC and BERC have determined generic tariff for
the FY2013-14 and FY2014-15 at reduced rates. The proposed capital cost for
FY2015-16 by the CERC is Rs587 lakhs/MW only.
Recently, BSPHCL has executed PPAs with solar PV project developers
for an aggregate capacity of 100MW through tariff based competitive bidding
process. The tariff in the PPAs vary between Rs. 7.87/kWh and Rs. 8.73/kWh.
In addition to the above, BSPHCL has also executed PPA with the Solar
Power Corporation of India for supply of 10 MW of Solar PV power at a tariff of
Rs5.50/Kwh under JNNSM batch-II, phase -1.
The capital cost and consequently cost of tariff of the Solar PV projects
are reducing consistently each year. Therefore, bidders who defaulted the
deadline of commissioning schedule (i.e. 31.03.2015) of Solar PV projects
should not be awarded time extension at the same tariff i.e. Rs.10.90/kWh
otherwise it will have serious audit implication for NBPDCL & SBPDCL as the
tariff obtained from the bidding process for 100 MW Solar PV has yielded lower
tariff discovery. However, BSPHCL is not against the extension of the COD of
the Solar PV projects.
3.3.12
Petitioners have quoted APTEL's Order dated 02.01.2013 in Appeal
Nos.96 and 130 of 2012 wherein it is recorded that "It is the Commission which
is alone competent to scrutinize the merits and demerits of each fact. It has to
find as to whether expenditures were made or committed ahead of the date of
Commissioning of the project so that no unfair advantage is claimed by any
developer on the ground of prospective reduction of capital cost. If the
23
particulars of expenditure already made or committed during the control period
are scrutinized and grants are scrutinized in the perspective of each individual
case then possibly it would be clear to the Commission as to whether and in
which case a developer comes with clean hands or not."
Subsequent to order of Hon'ble APTEL, an appeal was filed by GUVNL
before the Hon'ble Supreme Court in which Hon'ble Supreme Court has held as
under :"We are not inclined to interfere with the order passed by the
Appellate Tribunal for Electricity. The civil appeals are,
accordingly, dismissed. We, however, make it clear that the
Commission shall decide the whole issue without being
influenced by the observation made by the Appellate Tribunal
for Electricity in accordance with law."
In compliance of the order of Hon'ble Supreme Court, Gujarat
Electricity Regulatory Commission (GERC) passed an order extending the
control period for the project of one petitioner. However, the facts of Gujrat case
which have been quoted here are totally different from the present case. In case
of Gujrat project, the solar power plant had already been erected and was
waiting for the transmission line to evacuate power generated by the plant. Even
before the erection of the plant, there was delay in land acquisition in that case
due to change of government policy regarding land. In the present case, there is
no change of government policy affecting the project. Moreover the power plant
is not ready and respondent BSPHCL cannot be blamed for not providing
evacuation facility when the power plant itself is not constructed.
3.3.13
If a petitioner/developer is not able to commission the plant within the
control period, they are entitled to the generic tariff for the project as
determined by the Commission during the subsequent control period as
applicable on their COD.
Module prices in international market continue to decline. There is a
reduction in benchmark capital cost of solar PV projects in last successive years
notified by the CERC. Benefit of reduction in capital cost of the project due to
24
delay in procurement and commissioning should be passed on to the
Consumers .
3.3.14
Extension of control period for the project of the petitioner at a
levelised tariff of Rs. 10.90 will amount to giving undue benefit to the petitioner
and amounts to abuse of the process of the Commission. Therefore, the
Commission does not find any justification for extending the control period for
the project of the petitioner.
4.
Case No. 07/2015:
Submission of M/s Sri Avantika Contractors (I) Limited
4.1
M/s Sri Avantika Contractors (I) Limited has submitted that they have
signed Power Purchase Agreement with Bihar State Power Holding Company
Limited on 01.03.2013 to set up a 5 MW Solar Photo Voltaic Power Plant at
Village Rampurwa, Block Gaunaha, District. Champaran to supply 8.322 MU
per annum to the Respondent BSPHCL from the date of Commissioning of the
Plant at the rate determined by the Commission in its Order No. 12/2012 dated
29th May, 2012
That as per Clause 1.1.0 of PPA, purchase of power by BSP(H)CL from
our solar PV power plant will be at the generic levellized tariff and other terms
and conditions as determined by BERC vide tariff order no 12/2012 dated 29 th
May, 2012 for the projects which are commissioned during the control period
i.e up to 31st March 2015 and for which PPA is signed up to 31.03.2013.
3.4.2
That the petitioner has made genuine and sincere efforts to set up the
project and so far we have made substantial progress in project execution which
would be evident form the following facts:
1.
Land has been registered in the name of Company
2.
All mandatory clearances have been obtained
3.
Boundary wall has been erected
4.
Leveling and site grading completed
5.
Temporary shed for housing materials is ready
6.
Financial Closure with IREDA complete
7.
EPC work awarded
25
8.
1st lot of structures & panels likely to arrive within 15 days
9.
Civil foundation work is in progress
10. Promoter total investment so far exceeds 15 Crs which excluding
bank guarantee of Rs 2.5 Crs furnished at the time of signing of
PPA.
4.1.1
That as incorporated in Para-1.1.3 (b) of PPA, NBPDCL has to provide
Grid Connectivity and Evacuation Arrangement for our Solar Power Plant at
Village Rampurwa, Block Gaunaha, District, Champaran in consonance with
the provision of Clause 4.2.2& 4.2.3 of the Bihar Policy for Promotion of New
and Renewable Sources-2011 which has been notified by the Govt. of Bihar vide
resolution no Pra 02/BREDA Apra Niti-11/08/2845 dated 24.06.2011.
4.1.2
That Bihar Policy for promotion of New and Renewable Energy Sources
2011, Para-4.2.3 lays down that "the capital cost of transmission system for
evacuation of power to the nearest grid/ substation including all metering &
protective instruments shall be borne by erstwhile BSEB, now (BSPHCL) which
shall be reimbursed to erstwhile BSEB by the State Government, provided that
the project developer offers to supply Distribution Licensee at least 50% subject
to a minimum of 2 MW, of power generated from New and Renewable Energy
projects.
4.1.3
That the capacity of our plant is 5 MW and we have signed PPA for
supply of 8.322 MU per annum to NBPDCL at delivery point. Thus we have
offered entire power generated from our 5 MW capacity power plant to NBPDCL
and so we qualify for benefits under the said clause of RE Policy 2011 of State
Govt. for grid interfacing and evacuation arrangement.
4.1.4
That unfortunately the banks/financial institutions are showing
reluctance to provide debt funding of solar project in Bihar. First annual
integrated rating for State Power Distribution Utilities under the integrated
rating methodology formulated by Ministry of Power was carried out by
independent agencies ICRA & CRSIL. Bihar Distribution Companies has been
awarded "B" grad which shows below Average Operational and Financial
26
Performance Capability of BSPHCL. This matter was raised before the Energy
Secretary-cum CMD, by Bihar State Power Distribution Company Ltd. A
meeting of Bankers and Solar Developers was also called by BSPHCL. The
Respondent Power Holding Company has also interacted with various financial
institutions but nothing tangible happened.
Finding no support at state level financial institutions, the petitioner
approached Indian Renewable Energy Development Agency for sanction of debt
portion of loan for our 5 MW solar project. The Agency asked us to submit
confirmation letter from BSPHCL in the prescribed format that the demand
drafts/cheques/pay orders/other instruments towards payment to M/s Sri
Avantika Contractors (I) Limited shall be in drawn in an account (A/c no to be
mentioned) opened by the Company for the said purpose with an undertaking
that the above arrangement shall not be stopped/changed without approval of
IREDA. Our this request letter was acknowledged by BSPHCL on 21.08.2014.
But unfortunately in spite of our repeated request and persuasion, reply of the
letter to IREDA was sent by BSPHCL after a gap of nearly 4 months (on
05.12.2014). This abnormally delayed processing of project for disbursement of
finance and finally we got disbursement of loan form IREDA only in the middle
of January, 2015. This could have been avoided had Power Holding Company
given clearance in time.
4.1.5
years
That the petitioner has been making regular submission since last two
to
NBPDCL
for
arranging
for
Grid
Interfacing
and
Evacuation
Arrangement but no order has so far been issued by the Distribution Company.
4.1.6
After prolong delay of nearly two years & to delay it further, the Power
Company has sought clarification from Energy Department, Government of
Bihar vide BSPDCL/Com/109/2013 letter No. 889 dated 29.032014 regarding
interpretation of clause 4.2.3 of RE Policy 2011:
1. The project developers should supply at least 50% or 2MW consistent
power, ie.-all the 365 days and 24 hours in a year.
2. The Project developers should at least supply power in a year on the
basis of CUF of 19% as determined by the Commission.
27
4.1.7
That the Capacity Utilization Factor (CUF) depends primarily on solar
radiation which is available in day time only. There are other factors like
temperature, air velocity, module type and quality, angle of tilt, design
parameters efficiencies of inverters and transformers etc which effects the
generation, Sun is available on average for 300 days in a year and even a
layman having no engineering background can without any hesitation say that
solar plant cannot generation all the 365 days and 24 hours in a year. That we
fail to understand why authorities of the Distribution Company have mixed up
MW and MWH when they Engineer very well understand that former relates to
rated capacity of plant and second takes into the hours of generation from the
rated capacity of plant.
4.1.8
This matter was brought to the notice of BERC and the Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar stating
there in that project developers should at least supply power in a year on the
basis of CUF as approved by the Commission. Under the circumstance, the
Respondent BSPHCL has to provide transmission system for evacuation of
power to the nearest grid/sub-station including all metering & protective
instruments as per provision in the State RE Policy which has been
incorporated in the PPA.
4.1.9
That in spite of repeated reminders, the Respondent Power Company
has not even given us permission to go ahead to construct the 33 KV evacuation
line and erect the bay & set up the PT, CT breaker and switches, metering etc in
the adjoining Sub-Station, Gaunaha, West Champaran for evacuation of power
from our plant in spite of the fact the we have already submitted a list of
equipments with details of make, capacity etc that we propose to erect at the
sub-station.
4.1.10
That our project is located in North Bihar and transportation of heavy
materials like structure, ramming m/c etc which are to be delivered during this
month is not being allowed to cross/pass through Ganga Bridge neither
through Mokama nor Patna. This has delayed the delivery schedule and so the
commissioning schedule of plant.
28
4.1.11
This matter was also raised several time in the meeting of State
Investment Promotion Board and developers of Solar Power Projects who have
been allowed by Energy Department to sign PPA with Bihar State Power Holding
Company
Ltd.
In
the
minutes
of
meeting
held
on
29.01.2015
and
communicated by SIPB letter no 289 dated 10.02.2015, it has been mentioned
that since the matter regarding deciding the issue of Commercial Date of
Operation (COD) relates to Energy Deptt. Govt of Bihar, necessary decision into
the matter will be taken by the Energy Department and communicated to SIPB.
The decision of the department is still awaited.
4.1.12
That the petitioner prayer is not for any relief under section 86(f) of EA
2003 in terms of PPA but seeking exercise of the inherent regulatory power of
the Commission to grant extension of Control Period of the order No-12/2012
dated 29th May, 2012.
4.1.13
That APTEL in its order dated 02.01.2013 in Para 23,24 & 25 in
Appeal No. 96 of 2012 and 130 of 2012 has recorded that:
"The reasoning of the Commission that extending the control period would
mean amendment of the Tariff Order is not at all possible to concede to. The
Commission, it will be noticed from the impugned order, was conscious that
individual petitions referred to individual to project specific problems and
issues and some prayed for one month extension, while some prayed for six
months extension. The Commission came to the conclusion that unless there
would happen a state-wide and large scale ramifications then only there
could be a case for issue of a general order to extend the control period. Yet,
the Commission said at the same breath that it has inherent power to
extend the control period and it was made available when GETCO was at
default. The basic premise that unless there is wide and large scale
ramifications across the State in respect of the renewable sources of energy
there cannot be extension of control period by general order is to say the
least, not a legal approach and such an approach would defeat the very
spirit of the law. The GUVNL and the Govt. of Gujarat accepted the
proposition that inherent power can be exercised to a genuine problem. In
29
paragraph 10.7 of the order impugned, the Commission has observed "Even
if we do not take into cognizance the above cited decisions of the TNERC,
the provisions of Regulation 80 of the Commission's Regulations, Section
151 of the Civil Procedure Code and related decisions of the Hon'ble
Supreme Court make it abundantly clear that the Commission has inherent
power to issue any order, to meet the end of justice, if it is inconsistent with
the relevant provisions of the Regulations/Act. This power is not limited to
only procedural matter." This observation makes it clear that Commission
was dealing with the petitions by virtue of the power expressly given to the
Commission by their own Regulation to exercise inherent power. The
petitions of the two appellants were not the ones under Section 86 (1) (b)
of the Electricity Act, 2003. Now, it is not logical to argue that unless
there is state-wide large scale ramifications inherent power cannot be
exercised. The relevant Regulation of the Commission is exactly identical
in language and language and spirit with section 151 of the CPC. This
provision of inherent power does not by itself confer any power but only
indicates that there is a power to make an appropriate order as may be
necessary to achieve justifice and prevent the abuse of the process of law.
It has been held by the Hon'ble Supreme Court in Raj Bahadur RasRaja
Vs. Seth Hiralal, AIR 1962 SC 527, that the inherent power is not a power
given to the Court, it inheres in the Court itself so that by virtue of
exercise of such power, justice is rendered. In Ramji Dayawala, Vs. invest
import (1981) 1 SCC 80, the Hon'ble Supreme Court held that the
discretion vested in the Court is dependent on various circumstances
which the Court has to consider and there is no limitation for application
of the inherent power. Therefore, each case has to be decided on its own
merit and simply because of the fact that some of the grounds were
common to all the petitions the treatment of the alleged common grounds
has to be common. While saying so, we are not oblivious to the legal
proposition that inherent power cannot be exercised when prohibited or
excluded by the statute itself and when there are specific provisions to
30
address the remedy. That is to say, inherent power can be exercised only
for the ends of justice. The very exercise of inherent power or non-exercise
of inherent power depends upon consideration of specific facts. The
argument of the GUVNL and for that matter of the commission that
extension of control period would be prejudicial to the PPA is again not
acceptable. Firstly, PPA is to subordinate to the Tariff Order although it is
based on that. The provision in the PPA that unless projects are
commissioned within the specified period tariff as per the Tariff Order
dated 29.01.2010 would not be available does not conflict with exercise of
inherent power. If situations having wide scale ramifications warrant
exercise of inherent power for extension of control period then also a
certain PPA may have some consequences. Liquidated damages are
available to the GUVNL only when defaults occur on the part of the
developer, but when a situation is seen where circumstances regardless of
whether wide scale ramifications across the State happen or do not
happen went beyond the control of developer then exercise of the inherent
power which the Commission does have in their statute may be exercised
but each case has to be decided on its own merit. The existence of forcemajeure condition definitely comes within the framework of the Power
purchase Agreement but exercise of inherent power is always case specific
and it cannot be equated with force majeure. Again extension of control
period cannot be any stretch of imagination would amount to amendment
to the Tariff Order Amendment of the Tariff Order by virtue of section 62
(4) of the Electricity Act, 2003 was not prayed for. Since in every venture
there is allocation of risk, it cannot be said that even if a certain developer
experiences hurdles beyond his control, he has to abide by such hurdles,
When fact in each case is hotly contested by a counter fact or denial,
justice demands that each fact has to be separately dealt with and
decided. It is the Commission which is alone competent to scrutinize the
merits and demands of each fact in each of the two Appeals. It is the
Commission that has the infrastructure and capability to examine and
31
find as to whether expenditure were made and committed ahead of the
date of the date of commissioning of the project so that no unfair
advantage is claimed by any developer on the ground of prospective
reduction of the capital cost. if the particulars of expenditure if already
made or committed during the control period are scrutinized and the
grounds are scrutinized in the perspective of each individual case then
possibly it would be clean to the Commission as to whether and in which
case a developer comes with clean hands or not.
4.1.14
That Commission has powers to add, vary, alter, modify or amend any
provisions on its own motion or on any application made before it by an
interested person under regulation clause 15 and 39 respectively of the Bihar
Electricity
Regulatory
Commission
(Renewable
Purchase
Obligation,
its
Compliance and REC Framework Implementation) Regulations, 2010 & Bihar
Electricity
Regulatory
Commission
(Terms
and
conditions
for
Tariff
Determination From Solar Energy Sources) Regulation 2010.
4.1.15
That under clause 14.2 of PPA, the Commission has the power to
adjudicate all matters questions, disputes and/ or concerning and/or in
connection with and/ or in consequence or relating to PPA under sub section)1)
(f) of section 86 of EA 2003, read with section 143 and 158 of the Act.
4.1.16
That the Commission has inherent power to provide justice to the
petitioner and extend the Control Period in the large interest of State of Bihar
where so far not a single solar power plant has come up and whereas the
petitioner is making all genuine efforts to commission the plant in earliest
possible time which is evident from the progress so far made as recorded in
earlier para 3. In view of fact as explained above, the petitioner has prayed to
the Commission to extend the Control Period for at least three months (till 30th
June, 2015) for commissioning of our solar power plant and evacuation of
power to grid as per PPA or pass any such order as deemed fit and appropriate
in the interest of justice.
4.2
Commission’s analysis, views and findings :-
32
4.2.1
Petitioner's submission and status report submitted by BREDA were
analysed by the Commission and Commission views the following :The petitioner has sought relief to extend the control period for at least
three months (till 30th June2015) for commissioning of Solar PV plant and
evacuation of Power to grid as per PPA at the generic levellised tariff and other
terms and conditions as determined by the Commission in its order no.12/2012
dated 29.05.2012.
Petitioner has stated that under the provisions of Clauses 15 of the
BERC (RPO, its Compliance and REC Framework Implementation) Regulations,
2010 and clause 39 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010 ,Commission has powers to add,
vary, alter, modify or amend any provision on its own motion or an application
made before it by an interested person.
Commission has power to adjudicate all matters, questions, disputes
and /or concerning and/or in connection with and/or in consequence or
relating to PPA under subsection (1) (f) of section 86 of Electricity Act 2003 read
with section 143 and 158 of the Act.
Hon'ble APTEL in its order dated 02.01.2013 in Appeal No. 96 of 2012
and 130 of 2012 has also held that the relevant Regulations of the Commission
is identical in language and spirit with section 151 of the CPC. Therefore, The
Commission considers that it has inherent power to pass any order for ends of
justice and to prevent abuse of the process of the Commission.
Whether this jurisdiction will apply to a particular case will depend on the facts
of each case.
Clause 37 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010 provides that the Commission
may by general or special order, for reasons to be recorded in writing, and after
giving an opportunity of hearing to the parties likely to be affected may relax
any of the provisions of these Regulations on its own motion or on an
application made before it by an interested person. These Regulations have
already been amended vide Commission's order dated 14.06.2013 in Suo-motu
33
proceedings No. 9/2013 in which the generic levellised tariff for solar PV
including rooftop PV projects has been revised to Rs. 7.87 per kWh as net
levellised tariff after adjustment for accelerated depreciation and Rs. 8.75 per
kWh as levellised tariff without adjustment for accelerated depreciation. The
control period for this tariff has already been revised and made applicable for
project for which PPA has been signed for 31.03.2014 and the projects are
commissioned by 31.03.2015.
The petitioner has submitted in para 3 that genuine and sincere efforts
to set up the project has been made and substantial progress in project
execution is evident from following facts (i) Land has been registered in the
name of Company (ii) All mandatory clearances have been obtained(iii)Financial
Closure with IREDA completed (iv)EPC work awarded(v)1st lot of structures &
panels likely to arrive within 15 days and (vi)Civil foundation work is in progress
Promoter total investment so far exceeds 15 Crores .
4.2.2
The reasons for delay in execution of the project as per petitioner are
the following:1. NBPDCL has to provide Grid Connectivity and Evacuation Arrangement
for the Solar Power Plant as per provision of clause of 4.2.3 Bihar
Policy,2011.
The plant capacity of the proposed solar PV plant is 5 MW and PPA has
been signed for supply of 8.322 MU per annum to NBPDCL at delivery
point. Thus, the petitioner has offered entire plant capacity to NBPDCL
and therefore, claims to qualify for benefits under the said clause of RE
Policy 2011 of the State Govt. for grid interfacing and evacuation
arrangement.
Petitioner has been making regular submission since last two years to
NBPDCL for arranging for Grid Interfacing and Evacuation Arrangement
but no order has so far been issued.
2. Issues relating to Capacity Utilization Factor was raised by the BSPHCL
and clarification from Energy Department, Government of Bihar was
34
requested vide letter No. 889 dated 29.032014 regarding interpretation of
clause 4.2.3 of RE Policy 2011.
3. This matter was brought to the notice of BERC and the Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar
stating there in that Compliance of 50% of power supply subject to
minimum of 2 MW should be based on the supply of electricity at
PLF/CUF approved by BERC for the project, depending on source of
renewable energy. The project developers shall be eligible for incentive
under clause 4.2.3 of the policy if above compliance is achieved.
4. The respondent NBPDCL has not even permitted to construct the 33 KV
evacuation line of their own and erect the bay & set up the PT, CT breaker
and switches, metering etc in the adjoining Sub-Station, Gaunaha, West
Champaran for evacuation of power from the plant in spite of the fact that
a list of equipments with details of make, capacity etc that petitioner
proposed to erect at the sub-station was also submitted.
5. The petitioner was making all out efforts for debt/funding of the project
from the banks/financial institutions. A meeting of Bankers and Solar
Developers was also called by BSPHCL. The Respondent BSPHCL has also
interacted with various financial institutions but nothing tangible
happened. The petitioner approached IREDA for sanction of debt portion
of loan for the 5 MW solar project.The Agency asked to submit
confirmation letter from BSPHCL in the prescribed format that the
demand drafts/cheques/pay orders/other instruments towards payment
to M/s Sri Avantika Contractors (I) Limited shall be in drawn in an
account opened by the Company for the said purpose with an
undertaking that the above arrangement shall not be stopped/changed
without approval of IREDA. Request letter was acknowledged by BSPHCL
on 21.08.2014. But unfortunately in spite of
repeated request and
persuasion, BSPHCL replied to IREDA after a gap of nearly 4 months (on
05.12.2014).
This
abnormally
delayed
35
processing
of
project
for
disbursement of finance and finally petitioner got disbursement of loan
from IREDA only in the middle of January, 2015.
6. The project site is located in North Bihar and transportation of heavy
materials like structure, ramming m/c etc which are to be delivered
during this month is not being allowed to cross/pass through Ganga
Bridge neither through Mokama nor Patna. This has delayed the delivery
schedule and so the commissioning schedule of plant.
7. As the commissioning schedule of the project was delayed, extension of
time for commissioning of the project was sought from SIPB. Matter was
also raised several times in the meeting of SIPB. The SIPB vide letter no
289 dated 10.02.2015 mentioned that since the matter regarding deciding
the issue of Commercial Date of Operation (COD) relates to Energy Deptt.
Govt of Bihar, necessary decision into the matter will be taken by the
Energy Department and communicated to SIPB. The same is still awaited.
4.2.3
The Commission has considered various reasons for delay submitted
by the petitioner and views that:1. The issue of erection of transmission and evacuation arrangement and
interpretation of clause 4.2.3 of Bihar Policy for Promotion of New &
Renewable Energy Sources,2011 is an exercise which could have been
done simultaneously as a parallel activity along with the erection of the
power plant at site. The exercise of seeking interpretation of clause 4.2.3
of the Bihar Policy,2011 regarding funding of evacuation infrastructure
did not prevent the petitioner in any way from erecting the Power Plant.
Since the project is not ready for evacuating power, in spite of delay in
construction of evacuation system, petitioner cannot blame others for the
delay in plant erection.
2. Petitioner has also raised the issue of funding of the project. Mobilisation
of necessary funds for the project is necessarily the responsibility of the
project developer and not so much of the respondent BSPHCL. Still
meeting of Bankers and Solar Power Developers was called by BSPHCL
36
and they interacted with various financial institutions to finance the
projects in Bihar. This reason cannot be said to be beyond the control of
the petitioner.
3. Route for transportation of heavy materials and possible options for
transportation are the responsibility of the developer. If a particular route
for transporting material is not permitted, other alternative routes and
transport through railways could have been explored. The developer is
responsible to complete the project as per timeline specified in the Bihar
policy and the PPA. All consents, clearances and permits required for
establishment and operation of the Solar Plant are to be obtained at their
own cost.
4. After Completion of hearing, petitioner in a subsequent submission dated
26.03.2013, submitted copies of Letter of Award(LOA) to AIC Solar
Projects Pvt.Ltd for Rs 37.03 crores and EPC Contracts executed dated
18.04.2013 and a Letter of department of Energy, GOB dt.04.03.2015 .
The EPC Contract was executed on 18.04.2013 according to which project
was required to be completed in 9 months from the ‘Notice to Proceed’
issued by the purchaser to the Supplier. But, petitioner has not
submitted any details regarding delivery of P&M at site till date even after
lapse of two years. This delay is fully attributable to the petitioner
themselves.
5. Petitioner in an additional submission dated 09.4.2015 has submitted
the following:-(i)Copy of letter from BREDA to MNRE for grant of benefits
of custom excise duty exemption(ii)copies of bill of lading, insurance
etc(iii) copies of letter to bank
for transferring additional fund to EPC
contractor(iv) copies of Charted Accountants certificate.
A glance over the copy of letter no.501 dated 26.03.2015 seeking approval
for exemption of Excise Duty on bill of materials required for Solar Power
Plant indicate that petitioner has not enclosed a copy of the ‘total bill of
material’ shown as enclosure. Cost details are also not submitted.
37
A copy of certificate submitted indicate that petitioner is consignee for
10624 pcs of solar modules vide invoice no.HSOL1300003882-13-25
dated 6.03.2015.However, in
scope of supply
of
the EPC contract,
quantity shown is 22000 PV Solar modules.
A sum of Rs 2.247crores has been indicated as transfer of fund to EPC
contractor(Rs68.60 lakhs in the name of M/s AIC Solar Projects Pvt.Ltd
and a total of Rs.1.562 crores in the name of Schneider Electric India Ltd
as LC margin money and advance for purchase of equipments)
Petitioner has also submitted a copy of certificate from Charted Accounts
dated 12.03.2015 wherein an expenditure of Rs2841.37 lakhs as on
28.02.2015 is shown incurred towards setting up of 5 MW PV power
plant.
Perusal of the additional submissions, indicate that consequent upon
EPC contract dated 18.04.2013, a “Notice To Proceed” was to be issued by
the Purchaser to the supplier and project was to be completed on or
before 28.12.2013(the scheduled completion date). Payment terms
mentioned in the clause 6.3 of the contract indicate that 10% of the
contract amount is advance and 15% as milestone payment upon
placement of order for Inverter and modules.
Petitioner has not submitted any document nor has claimed that Plant
and machinery has reached the site and activity milestone required to be
completed after 18 months as per provisions of Bihar policy, 2011 has
been achieved. If the supplier has been granted extension of time or
contract has been revised at new terms and what is the actual status has
not been mentioned.
To make one understand that the project will be completed within next 3
months, the present status of the project stating achievement of
milestones, details of expenditure incurred supported by corroborative
evidence
should
have
been
submitted
Commission.
38
for
consideration
of
the
The available information in the petition and subsequent submissions fail
to satisfy that if the control period is not extended, the petitioner is likely
to suffer or incur loss especially when a capital cost reduction trend is
prevailing in solar PV market in the past years.
6.
BREDA, the nodal agency for monitoring all New and Renewable projects
approved by SIPB as provided in Bihar Policy,2011 has submitted a
status report on vide letter no.592 dated 15.4.2015.According to this
report
M/s
Avantika
Contractors(I)
Ltd
has
completed
boundary
construction, levelling and site grading and temporary shed construction.
Civil work is in progress. Financial closure has been achieved and EPC
contractor finalised.
The above status report does not indicate that power plant is nearing
completion stage.
7.
Petitioner has further mentioned that SIPB vide letter no.289 dated
10.2.2015 has mentioned that issues related to COD are to be decided by
Energy Deptt. Subsequent to the final hearing, the petitioner has
submitted a copy of the letter dated 4.3.2015 of Energy Deptt., Govt. of
Bihar consenting extension the COD for the project up to 30.06.2015.
The EPC contract was signed on 18.4.2013 and was to be completed
within 9 months. Even after lapse of two years Plant and Machinery are
yet to reach the site. By this time, the Commission has already revised
tariff of solar PV project for FY 2013-14 vide order issued by the
Commission on 14.06.2013. Subsequently CERC in its order No. SM
353/2013 dated 15.05.2014 has further reduced the benchmark capital
cost for FY 2014-15. Consequently the Commission has also issued
generic levellised tariff for Solar PV projects for FY2014-15 at the rate of
Rs7.69/Kwh.This tariff shall remain applicable till a new tariff for
Fy2015-16 is determined by the Commission. In the meanwhile, CERC
has further reduced the proposed capital cost of Solar PV projects for
Fy2015-16 fromRs.691lakhs/MW(FY2014-15) to Rs.587lakhs/MW. The
tariff rate of Rs.10.90/Kwh for FY2012-13 determined by the Commission
39
in petition no.12/2012 dated 29.5.2012 was based on the capital cost of
Rs.1000Lakhs/MW approved by the CERC.
Delay in execution of EPC contract by the petitioner for over two years
has caused such a situation where due to reduction in capital cost in the
past consecutive years, presently applicable generic tariff for the projects
to be commissioned by this time has come down to Rs7.69/kwh.
Recently, BSPHCL has executed PPAs with solar PV project developers for
an aggregate capacity of 100MW through tariff based competitive bidding
process.The tariff in the PPAs vary between Rs. 7.87/kwh and Rs.
8.73/Kwh.
In addition to the above, BSPHCL has also executed PPA with the Solar
Power Corporation of India for supply of 10 MW of Solar PV power at a
tariff of Rs5.50/Kwh under JNNSM batch-II, phase -1.
8. Petitioners have quoted APTEL's Order dated 02.01.2013 in Appeal
Nos.96 and 130 of 2012 wherein it is recorded that "It is the Commission
which is alone competent to scrutinize the merits and demerits of each
fact. It has to find as to whether expenditures were made or committed
ahead of the date of Commissioning of the project so that no unfair
advantage is claimed by any developer on the ground of prospective
reduction of capital cost. If the particulars of expenditure already made or
committed during the control period are scrutinized and grants are
scrutinized in the perspective of each individual case then possibly it
would be clear to the Commission as to whether and in which case a
developer comes with clean hands or not."
Subsequent to order of Hon'ble APTEL, an appeal was filed by GUVNL
before the Hon'ble Supreme Court in which Hon'ble Supreme Court has
held as under :"We are not inclined to interfere with the order passed by
the Appellate Tribunal for Electricity. The civil appeals are,
accordingly, dismissed. We, however, make it clear that
the Commission shall decide the whole issue without
40
being influenced by the observation made by the
Appellate Tribunal for Electricity in accordance with law."
In compliance of the order of Hon'ble Supreme Court, Gujarat Electricity
Regulatory Commission (GERC) passed an order extending the control
period for the project of one petitioner. However, the facts of Gujrat case
which have been quoted here are totally different from the present case.
In case of Gujrat project, the solar power plant had already been erected
and was waiting for the transmission line to evacuate power generated by
the plant. Even before the erection of the plant, there was delay in land
acquisition in that case due to change of government policy regarding
land. In the present case, there is no change of government policy
affecting the project. Moreover the power plant is not ready and
respondent BSPHCL cannot be blamed for not providing evacuation
facility when the power plant itself is not constructed.
9.
If a petitioner/developer is not able to commission the plant within the
control period, they are entitled to the generic tariff for the project as
determined by the Commission during the subsequent control period as
applicable on their COD.
Module prices in international market continue to decline. There is a
reduction in benchmark capital cost of solar PV projects in last successive
years notified by the CERC. Benefit of reduction in capital cost of the
project due to delay in procurement and commissioning should be passed
on to the Consumers.
10.
Extension of control period for the project of the petitioner at a levellised
tariff of Rs. 10.90/kwh will amount to giving undue benefit to the
petitioner and to abuse of the process of the Commission. Therefore, the
Commission does not find any justification for extending the control
period for the project of the petitioner.
5.0
Case No. 08/2015/
Submission of M/s Response Renewable Energy Ltd.
41
5.1.1
M/s Response Renewable Energy Ltd. has submitted that the
petitioner has signed Power Purchase Agreement with Bihar State Power
Holding Company Limited on 27.02.2013 to set up a 10 MW Solar Photo Voltaic
Power Plant at village Gangta, Block-Akbarpur, District-Nawada to supply
16.644 MUs per annum to the Respondent BSPHCL from the date of
Commissioning of the Plant.
5.1.2
That as per Clause 1.1.0 of PPA (Annexure-1), purchase of power by
BSP(H)CL from our Solar PV Power Plant will be at the generic Levelized tariff
and other terms and conditions as determined by BERC vide tariff order no
12/2012 dated 29th May, 2012 (Annexure-2) for the projects which are
commissioned during the Control Period i.e. up to 31st March, 2015 and for
which PPA is signed up to 31.03.2013.
5.1.3
Petition has submitted that they have been reporting progress report of
their project from time to time to competent authority of BREDA, SIPB &
BSPHCL. The up to date progress is indicated as below:

We have already acquired 70 acres of land.

financial closure has been made.

All mandatory clearances are in place.

EPC work has already been awarded to a German Firm.

Site leveling and grading work complete.

Temporary warehouse and office already constructed.

Construction of Boundary wall is in progress.

Since Holding Company has neither constructed transmission line
nor evacuation system at grid as per RE Policy, 2011 of state
government in spite of repeated request and even after issue of
BERC advisory, we have started construction of 5km of 33kv line
and more than 130 poles have already been erected.

Order for import of SMA inverter & in-built transformer have
already been placed on a German Firm & clearance of MNRE is
awaited for dispatch.
42

Order for modules has already been placed on a Chinese Firm &
first batch of PV panels have already arrived at the port.
5.1.4
As it would appear from the progress report as detailed above, we have
made all genuine & sincere efforts to commission the project in time. But due to
various unforeseen circumstances we are finding it difficult to commission our
10 MW Solar PV project by March, 2015 primarily because of the following
reasons:
5.1.5
That Bihar Policy for promotion of New and Renewable Energy Sources
2011, Para 4.2.3 (Annexure-3) lays down that "the capital cost of transmission
system for evacuation of power to the nearest grid/sub-station including all
metering & protective instruments shall be borne by BSPHCL which shall be
reimbursed to BSPHCL by the State Government, provided that the project
developer offers to supply Distribution Licensee at least 50% subject to a
minimum of 2MW, of power generated from New and Renewable Energy
projects.
5.1.6
The petitioner has signed PPA for supply of 16.644 MU per annum to
SBPDCL at delivery point. Thus they have offered entire 100% power generated
from their 10 MW Plant and so qualify for benefits under the said clause of RE
Policy 2011 of State Govt. for grid interfacing and evacuation arrangement.
5.1.7
The petitioner has been making regular submission since last two
years to SBPDCL, BSPHCL and BSPTCL for arranging Grid Interfacing and
Evacuation Arrangement but no order has so far been issued by them.
5.1.8
After prolonged delay of nearly two years & to delay it further, the
Power Company has sought clarification from Energy Department, Government
of Bihar vide SBJPDCL/Com/1092013 Letter no. 889 dated 29.03.2014
regarding interpretation of clause 4.02.3 of RE Policy 2011:
(i)
The Project developers should supply at least 50% or 2 MW
consistent power, ie. all the 365 days and 24 hours in a year.
(ii)
The project developers should at least supply power in a year on the
basis of CUF of 19% as determined by the Commission.
43
The Commission has decided CUF of Solar Plant as 19% Solar PV
Plant can not generate all the 365 days and 24 hours in a year. We
fail to understand why authorities of the Distribution Company have
mixed up MW and MWh.
5.1.9
This matter was brought to the notice of BREC and Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar confirming
that BSPHCL has to provide transmission system for evacuation of power to the
nearest grid/sub-station including all metering & protective instruments as per
provision in the State RE Policy which has been incorporated in the PPA.
5.1.10
In spite of repeated reminders, the Respondent Power Company has
not even given us permission to go ahead to make evacuation arrangement of
our own. Finding no way out, we have started construction of 5 kms of 33kv
line and more than 130 poles have already been erected and construction work
is in full swing.
5.1.11
In this connection it is further mentioned that we have earmarked the
space for erection of structure for installation of PT, CT, Breakers & Isolators &
also the place for putting control panel etc in the control room of Nawada GSS.
Unfortunately without caring for developer plan, the same has been utilized for
some other purpose and now we have to make extension of Gantry Column,
Construct cable trench etc. This has derailed our planning and now it will need
more time to erect and make all arrangements for grid connectivity & metering.
5.1.12
Arrangement for railway crossing was also to be made by the
Respondent as per RE Policy 2011 and as incorporated in PPA but finding no
alternative our company has applied for permission for Railway Crossing of 33
kv line through 185 sq mm XLPE cable at Danapur DRA office and has also
deposited necessary fee but we are yet to get permission.
5.1.13
It is matter of record that energy Department on the request of our
company has suggested BERC to allow imported solar modules to be used in
solar plants being set up by private developers. In the light of approval from
BERC, we are importing modules from China and first lot has already arrived at
44
the Kolkata port. Further we have already placed order for SMA inverter with in
built Transformer and SCADA system on a German firm.
5.1.14
Import of modules & inverters requires MNRE, Govt of India
permission for relief in import & other duties. WE have already applied for this
and waiting for approval from MNRE.
5.1.15
Unfortunately banks/financial institutions are showings no interest in
debt funding of solar project in Bihar. First annual integrated rating for
BSPHCL under the rating for state distribution utilities under the integrated
rating formulated by Ministry of Power, Govt of India was carried out by
independent agencies ICRA & CRISIL. Bihar Distribution Company has been
awarded "B" Grade which is below average operational financial performance
capability of BSPHCL. This matter was raised before CMD cum Secretary,
EnergyDeptt.
There
has
been
meeting
and
correspondences
with
banks/financial institutions but nothing tangible has come up.
5.1.16
Under the circumstances, we have to seek finance with co-laterals, etc
and finally we succeeded in financial closure but in the process a good deal of
time was lost which has resulted in delay in timely delivery of materials &
equipments.
5.1.17
This matter was also raised several times in the meeting of State
Investment Promotion Board and developers of Solar Power Projects who have
been allowed by Energy Department to sign PPA with Bihar State Power Holding
Company
Ltd.
In
the
minutes
of
meeting
held
on
29.01.2015
and
communicated by DIPB letter no 289 dated 10.02.2015, it has been mentioned
that since the matter regarding deciding the issue of Commercial Date of
Operation (COD) relates to Energy Deptt. Govt. of Bihar, necessary decision into
the matter will be taken by the Energy Department and communicated to SIPB.
The Decision of the department is still awaited.
5.1.18
That the petitioner's prayer is not for any relief under section 86 (f) of
EA 2003 in terms of PPA but seeking exercise of the inherent regulatory power
of the Commission to grant extension of Control Period of the order No 12/2012
dated 29th May 2012.
45
5.1.19
That APTEL in its order dated 02.01.2013 in Para 23,24 &25 in appeal
no 96 of 2012 and 130 of 2012 has recorded that:
"The reasoning of the Commission that extending the control period
would mean amendment of the Tariff Order is not at all possible to concede to.
The Commission, it will be noticed from the impugned order, was conscious
that individual petitions referred to individual to project specific problems and
issues and some prayed for one month extension, while some prayed for six
months extension. The Commission came to the conclusion that unless there
would happen a state-wide and large scale ramifications then only there could
be a case for issue of a general order to extend the control period. Yet the
Commission said at the same breath that it has inherent power to extend the
control and it was made available when GETCO was at default. The basic
premise that unless there is wide and large scale ramifications across the State
in respect of the renewable sources of energy, there cannot be extension of
control period by general order is, to say the least, not a legal approach and
such an approach would defeat the very spirit of the law. The GUVNL and the
Govt. of Gujarat accepted the proposition that inherent power can be exercised
to a genuine problem. In paragraph 10.7 of the order impugned, the
Commission has observed " Even if we do not take into cognizance the above
cited decisions of the TNERC, the provisions of Regulation 80 of the
Commission's Regulations, Section 151 of the Civil Procedure Code and related
decisions of the Hon'ble Supreme Court make it abundantly clear that the
Commission has inherent power to issue any order, to meet the end of justice, if
it is inconsistent with the relevant provisions of the Regulations/Act. This power
is not limited to only procedural matters." This observation makes it clear that
Commission was dealing with the petitions by virtue of the power expressly
given to the Commission by their own Regulations to exercise inherent power.
The petitions of the two appellants were not ones under Section 86 (1) (b) of the
Electricity Act, 2003. Now, it is not logical to argue that unless there is statewide large scale ramifications, inherent power cannot be exercised. The relevant
Regulation of the Commission is exactly identical in language and spirit with
46
section 151 of the CPC. This provision of inherent power does not by itself
confer any power but only indicates that there is a power to make an
appropriate order as may be necessary to achieve justice and prevent the abuse
of the process of law. It has been held by the Hon'ble Supreme Court in Raj
Bahadur Ras Raja Vs. Seth Hiralal, AIR 192 SC 527, that the inherent power is
not a power given to the Court, it inheres in the Court itself so that by virtue of
exercise of such power, justice is rendered. In Ramji Dayawala Vs. invest import
(1981) 1SCC 80, the Hon'ble Supreme Court held that the discretion vested in
the Court is dependent on various circumstances which the Court has to
consider and there is no limitation for application of the inherent power.
Therefore, each case has to be decided on its own merit and simply because of
the fact that some of the grounds were common to all the petitions the
treatment of the alleged common grounds has to be common, While saying so,
we are not oblivious of the legal proposition that inherent power cannot be
exercised when prohibited or excluded by the statute itself and when there are
specific provisions to address the remedy. That is to say, inherent power can be
exercised only for the ends of justice. The very exercise of inherent power or
non-exercise of inherent power depends upon consideration of specific facts.
The argument of the GUVNL and for that matter of the commission
that extension of control period would be prejudicial to the PPA is again not
acceptable. Firstly, PPA is to be subordinate to the Tariff Order although it is
based on that. The provision in the PPA that unless projects are commissioned
within the specified period tariff as per the Tariff Order dated 29.01.2010 would
not be available does not conflict with exercise of inherent power. If situations
having wide scale ramifications warrant exercise of inherent power for extension
of control period then also a certain PPA may have some consequences.
Liquidated damages are available to the GUVNL only when defaults occur on
the part of the developer, but when a situation is seen where circumstances
regardless of whether wide scale ramification across the State happen or do not
happen went beyond the control of developer then exercise of the inherent
power which the Commission does have in their statute may be exercised but
47
each case has to be decided on its own merit. The existence of force majeure
condition definitely comes within the framework of the Power Purchase
Agreement but exercise of inherent power is always case specific and it cannot
be equated with force majeure. Again extension of control period can not by any
stretch of imagination would amount to amendment of the Tariff Order
Amendment of the Tariff Order by virtue of section 62 (4) of the Electricity Act,
2003 was not prayed for. Since in every venture there is Allocation of risk, it
cannot be said that even if a certain developer experiences hurdles beyond his
control, he has to abide by such hurdles. When fact in each case is hotly
contested by a counter fact or denial, justice demands that each fact has to be
separately dealt with and decided. It is the Commission which is alone
competent to scrutinize the merits and demands of each fact in each of the two
Appeals. It is the Commission that has the infrastructure and capability to
examine and find as to whether expenditures were made and committed ahead
of the date of the date of commissioning of the project so that no unfair
advantage is claimed by any developer on the ground of prospective reduction of
the capital cost. It the particulars of expenditure if already made or committed
during the control period are scrutinized and the grounds are scrutinized in the
perspective of each individual case then possibly it would be clear to the
commission as to whether and in which case a developer comes with clean
hands or not."
5.1.20
Commission has powers to add, very, alter, modify or amend any
provisions on its own motion or on any application made before it by an
interested person under regulation clause 15 and 39 respectively of the Bihar
Electricity Regulatory (Renewable Purchase Obligation, its Compliance and REC
Framework Implementation) Regulations, 2010 & Bihar Electricity Regulatory
(Terms and Conditions for Tariff Determination From Solar Energy Sources)
Regulation, 2010.
5.1.21
Under clause 14.2 of PPA, the Commission has the power to adjudicate
all matters questions, disputes and/or concerning and/or concerning and/or in
48
connection with and/or in consequence or relating to PPA under sub section (1)
(F) of section 86 EA 2003 read with section 143 and 158 of the Act.
5.1.22
That the Commission has inherent power to provide justice to the
petitioner and extend the Control period in the larger interest of State of Bihar
where so far not a single solar power plant has come up whereas tariff has been
revised a number of times.
5.1.23
Whereas the petitioner is making all genuine & sincere efforts to
commission the plant in earliest possible time which is evident from the
progress so far made as recorded in earlier para.
5.1.24
In the light of above facts, we request Commission to kindly appreciate
our difficulties and allow extension of Control Period till 30.06.2015 so that we
commission the project which is in advance state of execution or pass any such
order as deemed fit and appropriate in the interest of justice.
5.2
Commission’s analysis, views and findings :-
5.2.1
Petitioner's submission and status report submitted by BREDA were
analysed by the Commission and Commission views the following :The petitioner has sought relief to extend the control period for at least
three months (till 30th June2015) for commissioning of Solar PV plant and
evacuation of Power to grid as per PPA at the generic levellised tariff and other
terms and conditions as determined by the Commission in its order no.12/2012
dated 29.05.2012.
Petitioner has stated that under the provisions of Clauses 15 of the
BERC (RPO, its Compliance and REC Framework Implementation) Regulations,
2010 and clause 39 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010 ,Commission has powers to add,
vary, alter, modify or amend any provision on its own motion or an application
made before it by an interested person.
Commission has power to adjudicate all matters , questions, disputes
and /or concerning and/or in connection with and/or in consequence or
relating to PPA under subsection (1) (f) of section 86 of Electricity Act 2003 read
with section 143 and 158 of the Act.
49
Hon'ble APTEL in its order dated 02.01.2013 in Appeal No. 96 of 2012
and 130 of 2012 has also held that the relevant Regulations of the Commission
is identical in language and spirit with section 151 of the CPC. Therefore, The
Commission considers that it has inherent power to pass any order for ends of
justice and to prevent abuse of the process of the Commission.
Whether this jurisdiction will apply to a particular case will depend on the facts
of each case.
Clause 37 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010 provides that the Commission
may by general or special order, for reasons to be recorded in writing, and after
giving an opportunity of hearing to the parties likely to be affected may relax
any of the provisions of these Regulations on its own motion or on an
application made before it by an interested person. These Regulations have
already been amended vide Commission's order dated 14.06.2013 in Suo-motu
proceedings No. 9/2013 in which the generic levellised tariff for solar PV
including rooftop PV projects has been revised to Rs. 7.87 per kWh as net
levellised tariff after adjustment for accelerated depreciation and Rs. 8.75 per
kWh as levellised tariff without adjustment for accelerated depreciation. The
control period for this tariff has already been revised and made applicable for
project for which PPA has been signed for 31.03.2014 and the projects are
commissioned by 31.03.2015.
The petitioner has submitted that genuine and sincere efforts to set
up the project has been made and substantial progress in project execution is
evident from following facts (i) Land acquired -70 acres (ii) All mandatory
clearances obtained(iii)Financial Closure completed (iv)EPC work awarded(v) As
the BSPHCL has not constructed transmission line even after BERC advisory,
construction of 5km of 33 kv line for evacuation of power started and more than
130 poles erected (vi)Order for modules placed on a chinese firm and 1 st lot of
PV panels have arrived at port.
5.2.2
The reasons for delay in execution of the project as per petitioner are
the following:50
1.
NBPDCL
has
to
provide
Grid
Connectivity
and
Evacuation
arrangement for the Solar Power Plant as per provision in the Bihar
policy,2011.
The plant capacity of the proposed solar PV plant is 10 MW and PPA
has been signed for supply of 16.644MU per annum to SBPDCL at
delivery point. Thus, the petitioner has offered entire plant capacity to
SBPDCL and therefore, qualifies for benefits under the said clause of
RE Policy 2011 of the State Govt. for grid interfacing and evacuation
arrangement.
Petitioner has been making regular submission since last two years to
SBPDCL,BSPHCL and BSPTCL for arranging for Grid Interfacing and
evacuation arrangement but no order has so far been issued by the
respondent.
2.
Issues relating to Capacity Utilization Factor was raised by the
BSPHCL and clarification from Energy Department, Government of
Bihar was requested vide letter No. 889 dated 29.032014 regarding
interpretation of clause 4.2.3 of RE Policy 2011
3.
This matter was brought to the notice of BERC and the Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar
stating there in that Compliance of 50% of power supply subject to
minimum of 2 MW should be based on the supply of electricity at
PLF/CUF approved by BERC for the project, depending on source of
renewable energy. The project developers shall be eligible for incentive
under clause 4.2.3 of the policy if above compliance is achieved.
4.
The respondent SBPDCL has not permitted the petitioner even to
construct the 33 KV evacuation arrangement of their own and erect
the bay & set up the PT, CT breaker and switches, metering etc in the
Sub-Station of Nawada GSS for evacuation of power from the plant
.Finding no way out, petitioner has started construction of 33 KV line
and more than 130 poles have already been erected. Extension of
51
Gantry column and construction of cable trenches etc will need more
time to make all arrangements for grid connectivity and metering.
5.
Petitioner has stated that import of modules & inverters
require
MNRE’s permission for relief in import and other duties. Permission is
awaited.
6.
The petitioner was making all out efforts for debt/funding of the
project from the banks/financial institutions. First annual integrated
rating for BSPHCL (under the rating for distribution utilities) under
integrated rating formulated by Ministry of Power, Govt. of India
,carried out by independent agencies ICRA & CRISIL, has awarded B
grade which is below average operational financial performance
capability. This matter was raised before CMD cum Secretary, Energy
Deptt. There has been meeting and correspondences with banks/
financial institutions but nothing tangible happened. Under the
circumstances, petitioner had to seek finance with co-laterals, etc and
finally financial closure was made and a good deal of time was lost
which has resulted in delay in timely delivery of materials and
equipments.
7.
As the commissioning schedule of the project was delayed, extension
of time for commissioning of the project was sought from SIPB. Matter
was also raised several times in the meeting of SIPB The SIPB vide
letter no 289 dated 10.02.2015 has mentioned that since the matter
regarding deciding the issue of Commercial Date of Operation (COD)
relates to Energy Deptt. Govt of Bihar,necessary decision into the
matter will be taken by the Energy Department and communicated to
SIPB. The same is still awaited.
5.2.3
The Commission has considered various reasons for delay submitted
by the petitioner and views that:1.
The issue relating to erection of transmission and evacuation
arrangement and interpretation of clause 4.2.3 of Bihar Policy for
Promotion of New & Renewable Energy Sources,2011 is an exercise
52
which could have been done simultaneously as a parallel activity along
with the erection of the power plant at site. The exercise of seeking
interpretation of clause 4.2.3 of the Bihar Policy,2011 regarding
funding of evacuation infrastructure did not prevent the petitioner in
any way from erecting the Power Plant. Since the project is not ready
for evacuating power, in spite of delay by respondent in deciding the
issues related to construction of evacuation system, petitioner cannot
blame others for the delay in plant erection.
2.
Petitioner has also raised the issue of funding of the project.
Mobilisation of necessary funds for the project is necessarily the
responsibility of the project developer and not so much of the
respondent BSPHCL. Still meeting of Bankers and Solar Power
Developers was called by BSPHCL and they interacted with various
financial institutions to finance the projects in Bihar. This reason
cannot be said to be beyond the control of the petitioner.
3.
Petitioner signed PPA on 27.2.2013 and has claimed that they are
importing solar modules from china and first lot has already arrived at
Kolkata port. EPC contract has been awarded and Order for SMA
Inverter with in-built Transformer and SCADA system has been placed
on a German firm. The import of modules and inverters require MNRE
permission for relief in import &other duties and the same is awaited.
All consent clearances and permits required for execution of the
project has to be obtained by the developer and milestone of activities
as provided in the NERS Policy,2011 has to achieved for timely
execution.
4.
Subsequently after completion of hearing, Petitioner has submitted
additional information dated 10.04.2015 wherein they have claimed an
expenditure of Rs.30.599 crores as on 27.3.2015, towards 10 MW
Solar PV power plant to be set up at Akbarpur, Nawada. They have
executed an EPC agreement dated17.10.2014 with M/s VISPIRON EPC
53
GmbH &Co.KG after one year and seven months from the date of PPA.
For this delay petitioner has not submitted any reason.
Petitioner has also submitted copies of work order for erection and
commissioning of 33KV O/H line from plant site to 132 KV /33KV
Nawada Grid substation on Turn key basis and delivery challans of
ramming M/C, Cables and conductors etc also.
As per EPC contract the project was to be completed within 22 weeks
from the agreement. Even after expiry of the time period, present
status of the project or EPC contract, whether it has been extended or
revised on new terms have not been mentioned.
Petitioner has neither submitted any document nor has claimed that
activity milestones for 18 months i.e. ‘P&M has been received at site’
has been achieved.
To make one understand that project will be completed within next 3
months, the present status of the contract should have been
mentioned.
The
details
of
expenditure
incurred
supported
by
corroborative evidence should have been submitted for consideration
of the Commission.
The available information in the petition and subsequent submissions
fail to satisfy that if the control period is not extended, the petitioner is
likely to suffer or incur loss especially when a capital cost reduction
trend is prevailing in solar PV market in the past years.
5.
BREDA, the nodal agency for monitoring all New and Renewable
projects approved by SIPB as provided in Bihar Policy,2011 has
submitted
a
status
report
vide
letter
no.592
dated
15.4.2015.According to this report M/s Response Renewable Energy
Ltd has acquired 80 acres of land, completed boundary construction,
levelling, site grading and temporary shed construction. Civil work like
warehouse, guard room and control room are constructed. 6.5 km of
transmission line erected and orders for cable, dog conductor, solar
modules and structures are placed whereas partially materials are
54
already dispatched to site. Ramming for the structural post is in
progress.
The above status report does not indicate that power plant is nearing
completion stage.
6.
Petitioner has further mentioned that SIPB Vide letter no.289 dated
10.02.2015 has mentioned that issues related to COD are to be
decided by Energy Deptt. However, Commission has received a copy of
consent for extension of COD up to 30.06.2015 by the Energy Deptt,
Bihar vide letter no 675 dated 4.3.2015
The EPC contract was signed on 17.10.2014 after lapse of one year
and seven months from the PPA. By this time capital cost of solar PV
projects reduced substantially. The Commission had already revised
tariff of solar PV project for FY 2013-14 vide order issued by the
Commission on 14.06.2013. Subsequently CERC in its order No. SM
353/2013 dated 15.05.2014 has further reduced the benchmark
capital cost for FY 2014-15. Consequently the Commission has also
issued generic levelised tariff for Solar PV projects for FY2014-15 at
the rate of Rs7.69/Kwh. This tariff shall remain applicable till a new
tariff for Fy2015-16 is determined by the Commission. In the
meanwhile, CERC has further reduced the proposed capital cost of
Solar
PV
projects
fromRs.691
lakhs/MW
in
FY2014-15
to
Rs.587lakhs/MW for Fy2015-16. The tariff rate of Rs.10.90/Kwh for
FY2012-13 determined by the Commission in petition no.12/2012
dated 29.5.2012 was based on the capital cost of Rs.1000Lakhs/MW
approved by the CERC.
The delay in signing EPC contract for over one and half years by the
petitioner has caused such a situation wherein project capital cost for
solar PV has been reduced twice by the CERC during the period
indicating reduction in market price of solar PV modules and the
petitioner must have done due diligence to award EPC contract on the
then prevailing market price and not on the price prevailing in March
55
2013 when PPA as signed at a tariff of Rs. 10.90/kWh and therefore,
the petitioner cannot claim the benefit of higher tariff now.
Recently, BSPHCL has executed PPAs with solar PV project developers
for an aggregate capacity of 100MW through tariff based competitive
bidding process. The tariff in the PPAs vary between Rs. 7.87/kwh and
Rs. 8.73/Kwh.
In addition to the above, BSPHCL has also executed PPA with the Solar
Power Corporation of India for supply of 10 MW of Solar PV power at a
tariff of Rs5.50/Kwh under JNNSM batch-II, phase -1.
7.
Petitioners have quoted Hon’ble APTEL's Order dated 02.01.2013 in
Appeal Nos.96 and 130 of 2012 wherein it is recorded that "It is the
Commission which is alone competent to scrutinize the merits and
demerits of each fact. It has to find as to whether expenditures were
made or committed ahead of the date of Commissioning of the project
so that no unfair advantage is claimed by any developer on the ground
of prospective reduction of capital cost. If the particulars of
expenditure already made or committed during the control period are
scrutinized and grants are scrutinized in the perspective of each
individual case then possibly it would be clear to the Commission as to
whether and in which case a developer comes with clean hands or
not."
Subsequent to order of Hon'ble APTEL, an appeal was filed by GUVNL
before the Hon'ble Supreme Court in which Hon'ble Supreme Court
has held as under :"We are not inclined to interfere with the order passed by
the Appellate Tribunal for Electricity. The civil appeals are,
accordingly, dismissed. We, however, make it clear that
the Commission shall decide the whole issue without
being influenced by the observation made by the
Appellate Tribunal for Electricity in accordance with law."
56
In compliance of the order of Hon'ble Supreme Court, Gujarat
Electricity Regulatory Commission (GERC) passed an order extending
the control period for the project of one petitioner. However, the facts
of Gujrat case which have been quoted here are totally different from
the present case. In case of Gujrat project, the solar power plant had
already been erected and was waiting for the transmission line to
evacuate power generated by the plant. Even before the erection of the
plant, there was delay in land acquisition in that case due to change of
government policy regarding land. In the present case, there is no
change of government policy affecting the project. Moreover the power
plant is not ready and respondent BSPHCL cannot be blamed for not
providing evacuation facility when the power plant itself is not
constructed.
8.
If a petitioner/developer is not able to commission the plant within
the control period, they are entitled to the generic tariff for the project
as determined by the Commission during the subsequent control
period as applicable on their COD.
Module prices in international market continue to decline. There is a
reduction in benchmark capital cost of solar PV projects in last
successive years notified by the CERC. Benefit of reduction in capital
cost of the project due to delay in procurement and commissioning of
the project should be passed on to the consumers.
9.
Extension of control period for the project of the petitioner at a
levelised tariff of Rs. 10.90/kwh will amount to giving undue benefit to
the petitioner and amounts to abuse of the process of the Commission.
Therefore, the Commission does not find any justification for extending
the control period for the project of the petitioner.
6.0
Case No. 09/2015: /
Submission of M/s Glatt Solutions Private Limited:
6.1.1
The petitioner has submitted that they have signed Power Purchase
Agreement with erstwhile Bihar State Electricity Board on 17.09.2012 to set up
57
a 3 MW Solar Photo Voltaic Power Plant at Village-Danapur, Block Akbarpur,
District-Nawada to supply 7.94 MUs per annum to the Respondent BSPHCL
from the date of Commissioning of the Plant.
6.1.2
That as per Clause 1.1.0 of PPA, purchase of power by BSP(HCL from
our Solar Plant will be at the generic levellized tariff and other terms and
conditions as determined by BERC vide tariff order no 12/2012 dated 29 th May,
2012 for the projects which are commissioned during the Control Period i.e. up
to 31st March, 2015 and fro which PPA is signed up to 31.03.2013
6.1.3
Petitioner has submitted that they have been reporting progress report
of the project from time to time to competent authority of BREDA, SIPB &
BSPHCL. The up to date progress has been indicated as below:

Acquired 25 acres of land

Financial closure has been made

All mandatory clearances are in place

EPC work has already been awarded to a German Firm

Site leveling and grading work Complete.

Site Boundary wall is completed.

Temporary warehouse and office already constructed.

Since Holding Company has neither constructed transmission line
nor evacuation system at grid as per RE Policy, 2011 of state
Government in spite of repeated request and even after issue of
BERC advisory, we have started construction of 2.5 km of 33 kv
line and more than 52 poles have already been erected.

Order for import of SMA inverter & in built transformer have
already been placed on a german firm & clearance of MNRE is
awaited for dispatch.

Order for modules has already been placed on a Chinese Firm &
first batch of PV panels have already arrived at the port.
6.1.4
Petitioner submitted that it would appear from the progress report
detailed above, they have made all genuine & sincere efforts to commission the
58
project in time. But due to various unforeseen circumstances, find it difficult to
commission 3 MW Solar PV Project by March, 2015 primarily because of the
following reasons:
6.1.5
That Bihar Policy for promotion of New and Renewable Energy Sources
2011, Para-4.2.3 lays down that "the capital cost of transmission system for
evacuation of power to the nearest grid/sub-station including all metering &
protective instruments shall be borne by BSPHCL which shall be reimbursed to
BSPHCL by the State Government, provided that the project developer offers to
supply distribution Licensee at least 50%, subject to a minimum of 2 MW, of
power generated from New and Renewable Energy projects.
6.1.6
That the capacity of our plant is 03 MW and we have signed PPA for
supply of 4.94 MU per annum to SBPDCL at delivery point. Thus we have
offered entire 100% power generated from our 03 MW Plant and so we qualify
for benefits under the said clause of RE Policy 2011 of State Govt. for grid
interfacing and evacuation arrangement.
6.1.7
That we have been making regular submission since last two years to
SBPDCL, BSPHCL, BSPTCL for arranging of Grid Interfacing and Evacuation
Arrangement but no order has so far been issued by them.
6.1.8
After prolong delay of nearly two years & to delay it further, the Power
Company has sought clarification from Energy Department, Government of
Bihar vide SBPDCL/Com/109/2013 letter No. 889 dated 29.03.2014 regarding
interpretation of clause 4.2.3 of RE Policy 2011:
i
The Project developers should supply at least 50% or 2MW
consistent power, i.e. all the 365 days and 24 hours in a year.
ii The Project developer should at least supply power in a year on the
basis of CUF of 19% as determined by the Commission.
6.1.9
Commission has decided CUF of Solar Plant as 19% Solar PV Plant
can not generate all the 365 days and 24 hours in a year. That we fail to
understand why authorities of the Distribution Company have mixed up MW
and MWH.
59
6.1.10
This matter was brought to the notice of BERC and Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar
Confirming that BSPHCL has to provide transmission system for evacuation of
power to the nearest grid/sub-station including all metering & protective
instruments as per provision in the State RE Policy which has been
incorporated in the PPA.
6.1.11
That in spite of our repeated reminders, the Respondent Power
Company has not even given us permission to go ahead to make evacuation
arrangement of our own. Finding no way out, we have started construction of
2.5 km of 33kv line and more than 52 poles have already been erected and
construction work is in full swing.
6.1.12
That in this connection we would like to further mention that we have
earmarked the space for erection of structure for installation of PT, CT Breakers
& Isolators & Isolators & also the place for putting control panel etc in the
control room of Nawada Grid. Unfortunately without caring for developer plan,
the same has been utilized for some other purpose and now we have to make
extension of Gantry Column, construct cable trench etc. This has derailed our
planning and now it will need more time to erect and make all arrangements for
grid connectivity & metering.
6.1.13
That arrangement for railway crossing was also to be made by the
Respondent as per RE Policy 2011 and as incorporated in PPA but finding no
alternative our company has applied for permission for Railway Crossing of 33
kv line through 185 sq mm XLPE cable at Danapur DRM office and has also
deposited necessary fee but we are yet to get permission.
6.1.14
It is matter of record that Energy department on the request of our
company has suggested BERC to allow imported solar modules to be used in
solar plants being set up by private developers. In the light of approval form
BERC, we are importing modules from china and first lot has already arrived at
the Kolkota port. Further we have already placed order for SMA Inverter with inbuilt Transformer and SCADA system on a German firm.
60
6.115
That Import of modules & inverters requires MNRE, Govt of India
permission for relief in import & other duties. We have already applied for this
and awaiting approval from MNRE.
6.1.16
That unfortunately banks/financial institutions are showing no
interest in debt funding of solar project in Bihar. First annual integrated rating
for BSPHCL under the rating for state distribution utilities under the integrated
rating formulated by Ministry of Power, Govt of India was carried out by
independent agencies ICRA & CRISIL. Bihar Distribution Company has been
awarded "B" Grad which is below average operational financial performance
capability of BSPHCL. This matter was raised befor CMD cum Secretary Energy
Deptt. There has been meeting and correspondences with banks/financial
institutions but nothing tangible has come up.
6.1.17
Under the circumstances, we have to seek finance with co-laterals, etc
and finally we succeeded in financial closure but in the process a good deal of
time was lost which has resulted in delay in timely delivery of materials &
equipments.
6.1.18
This matter was also raised several times in the meeting of State
Investment Promotion Board and developers of Solar Power Projects who have
been allowed by Energy Department to sign PPA with Bihar State Power Holding
Company
Ltd.
In
the
minutes
of
meeting
held
on
29.01.2015
and
communicated by SIPB letter no 289 dated 10.02.2015, it has been mentioned
that since the matter regarding deciding the issue of Commercial Date of
Operation (COD) relates of Energy Deptt, Govt of Bihar, Necessary decision into
the matter will be taken by the Energy Department and communicated to SIPB.
The Decision of the department is still awaited .
6.1.19
Petitioner has further submitted that their prayer is not for any relief
under section 86 (f) of EA 2003 in terms of PPA but seeking exercise of the
inherent regulatory power to the Commission to grant extension of Control
Period of the order No 12/2012 dated 29th May, 2012.
6.1.20
It is submitted further that Hon'ble APTEL in its order 02.01.2013 in
Para 23,24 & 25 in appeal No 96 of 2012 and 130 of 2012 has recorded that:
61
"The reasoning of the Commission that extending the control period
would mean amendment of the Tariff Order is not at all possible to
concede to. The Commission, it will be noticed from the impugned order,
was conscious that individual petitions referred to individual to project
specific problems and issues and some prayed for one month extension,
while some prayed for six months extension. The Commission came to the
conclusion that unless there would happen a state-wide and large scale
ramifications then only there could be a case for issue of a general order
to extend the control period. Yet, the Commission said at the same breath
that it has inherent power to extend the control period and it was made
available when GETCO was at default. The basic premise that unless
there is wide and large scale ramifications across the State in respect of
the renewable sources of energy there cannot be extension of control
period by general order is to say the least, not a legal approach and such
an approach would defeat the very spirit of the law. The GUVNL and the
Govt. of Gujarat accepted the proposition that inherent power can be
exercise to a genuine problem. In paragraph 10.7 of the order impugned,
the Commission has observed " Even if we do not take into cognizance the
above cited decisions of the TNERC the provisions of Regulation 80 of the
Commission's Regulations, Section 151 of the Civil procedure Code and
related decisions of the Hon'ble Supreme Curt make it abundantly clear
that the Commission has inherent power to issue any order, to meet the
end of justice, if it is inconsistent with the relevant provisions of the
Regulations/Act. This power is not limited to only procedural matters."
This observation makes it clear that Commission was dealing with the
petitions by virtue of the power expressly given to the Commission by
their own Regulations to exercise inherent power. The petitions of the two
appellants were not the ones under Section 86 (1) (b) of the Electricity
Act, 2003. Now, it is not logical to argue that unless there is state-wide
large scale ramifications inherent power cannot be exercised. The relevant
Regulation of the Commission is exactly identical in language and
62
language and spirit with section 151 of the CPC. This provision of
inherent power does not by itself confer any power but only indicates that
there is a power to make an appropriate order as may be necessary to
achieve justifice and prevent the abuse of the process of law. It has been
held by the Hon'ble Supreme Court in Raj Bhadur Ras Raja Vs. Seth
Hiralal, AIr 1962 SC 527, the inherent power is not a power given to the
Court, it inheres in the Court, it inheres in the Court itself so that by
virture of exercise of such power, justice is rendered. In Ramji Dayawala
Vs. invest import (1981) 1 SCC 80, the Hon'ble Supreme Court held that
the discretion vested in the Court is dependent on various circumstances
which the Court has to consider and there is no limitation for application
of the inherent power. Therefore, each case has to be decided on its own
merit and simply because of the fact that some of the grounds were
common to all the petitions the treatment of the alleged common grounds
has to be common. While saying so, we are not oblivious of the legal
proposition that inherent power cannot be exercised when prohibited or
excluded by the statute itself and when there are specific provisions to
address the remedy. That is to say inherent power can be exercised only
for the ends of justice. The very exercise of inherent power or non-exercise
of inherent power depends upon consideration of specific facts. The
argument of the GUVNL and for that matter of the commission that
extension of control period would be prejudicial to the PPA is again not
acceptable. Firstly, PPA is not subordinate to the Tariff Order although it
is based on that. The provision in the PPA that unless projects are
commissioned within the specified period tariff as per the Tariff Order
dated 29.01.2010 would not be available does not conflict with exercise of
inherent power. If situations having wide scale ramifications warrant
exercise of inherent power for extension of control period then also a
certain PPA may have some consequences. Liquidated damage are
available to the GUVNL only when defaults occur on the part of the
developer, but when a situation is seen where circumstances regardless of
63
whether wide scale ramifications across the State happen or do not
happen went beyond the control of developer then exercise of the inherent
power which the Commission does have in their statute may be exercised
but each case has to be decided on its own merit. The existence of force
majeure condition definitely comes within the framework of the Power
purchase Agreement but exercise of inherent power is always case specific
and it cannot be equated with force majeure. Again extension of control
period can not by any stretch of imagination would amount to
amendment of the tariff order Amendment of the Tariff Order by virtue of
section 62 (4) of the Electricity Act, 2003 was not prayed for. Since in
every venture there is allocation of risk, it cannot be said that even if a
certain developer experiences hurdles beyond his control, he has to abide
by such hurdles. When fact in each case is hotly contested by a counter
fact or denial, justice demands that each fact has to be separately dealt
with and decided. It is the Commission which is alone competent to
scrutinize the merits and demands of each fact in each of the two
Appeals. It is the Commission that has the infrastructure and capability
to examine and find as to whether expenditures were made and
committed ahead of the date of the date of commissioning of the project
so that no unfair advantage is claimed by any developer on the ground of
prospective reduction of the capital cost. If the particulars of expenditure
if already made or committed during the control period are scrutinized
and the grounds are scrutinized in the perspective of each individual case
then possibly it would be clear to the Commission as to whether and in
which case a developer comes with clean hands or not.
6.1.21
That Commission has powers to add, vary, alter, modify or amend any
provisions on its own motion or on any application made before it by an
interested person under regulation clause 15 and 39 respectively of the Bihar
Electricity Regulatory (Renewable Purchase Obligation, its Compliance and REC
Framework Implementation) Regulations, 2010 & Bihar Electricity Regulatory
64
(Terms and conditions for Tariff Determination From Solar Energy Sources)
Regulation 2010.
6.1.22
That under clause 14.2 of PPA, the Commission has the power to
adjudicate all matters, questions disputes and/or concerning and/or in
connection with and/ or in consequence or relating to PPA under sub section (1)
(f) of section 86 of EA 2003 read with section 143 and 158 of the Act.
6.1.23
That the Commission has inherent power to provide justice to the
petitioner and extend the Control period in the larger interest of State of Bihar
where so far not a single solar power plant has come up whereas tariff has been
revised a number of times.
6.1.24
That whereas the petitioner is making all genuine & sincere efforts to
commission the plant in earliest possible time which is evident form the
progress so far made as recorded in earlier Para.
6.1.25
Finally it has been requested to allow extension of Control Period till
30.06.2015 so that the project which is in advance stage of execution is
commissioned or pass any such order as deemed fit and appropriate in interest
of justice.
6.2
Commission’s analysis, views and findings :-
6.2.1
Petitioner's submission and status report submitted by BREDA were
analysed by the Commission and Commission views the following :The petitioner has sought relief to extend the control period for at least
three months (till 30th June2015) for commissioning of Solar PV plant and
evacuation of Power to grid as per PPA at the generic levellised tariff and other
terms and conditions as determined by the Commission in its order no.12/2012
dated 29.05.2012.
Petitioner has stated that under the provisions of Clauses 15 of the
BERC (RPO, its Compliance and REC Framework Implementation) Regulations,
2010 and clause 39 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010, Commission has powers to add,
vary, alter, modify or amend any provision on its own motion or an application
made before it by an interested person.
65
Commission has power to adjudicate all matters, questions, disputes
and /or concerning and/or in connection with and/or in consequence or
relating to PPA under subsection (1) (f) of section 86 of Electricity Act 2003 read
with section 143 and 158 of the Act.
Hon'ble APTEL in its order dated 02.01.2013 in Appeal No. 96 of 2012
and 130 of 2012 has also held that the relevant Regulations of the Commission
is identical in language and spirit with section 151 of the CPC. Therefore, The
Commission considers that it has inherent power to pass any order for ends of
justice and to prevent abuse of the process of the Commission.
Whether this jurisdiction will apply to a particular case will depend on the facts
of each case.
Clause 37 of BERC (Terms and Conditions for Tariff Determination
from Solar Energy Sources) Regulations, 2010 provides that the Commission
may by general or special order, for reasons to be recorded in writing, and after
giving an opportunity of hearing to the parties likely to be affected may relax
any of the provisions of these Regulations on its own motion or on an
application made before it by an interested person. These Regulations have
already been amended vide Commission's order dated 14.06.2013 in Suo-motu
proceedings No. 9/2013 in which the generic levellised tariff for solar PV
including rooftop PV projects has been revised to Rs. 7.87 per kWh as net
levellised tariff after adjustment for accelerated depreciation and Rs. 8.75 per
kWh as levellised tariff without adjustment for accelerated depreciation. The
control period for this tariff has already been revised and made applicable for
project for which PPA has been signed for 31.03.2014 and the projects are
commissioned by 31.03.2015.
The petitioner has submitted that genuine and sincere efforts to set
up the project has been made and substantial progress in project execution is
evident from following facts (i) Land acquired -25 acres (ii) All mandatory
clearances obtained(iii)Financial Closure completed (iv)EPC work awarded(v) As
the BSPHCL has not constructed transmission line even after BERC advisory,
construction of 2.5km of 33 KV line for evacuation of power started and more
66
than 52poles erected (vi)Order for modules placed on a chinese firm and 1 st lot
of PV panels has arrived at port.
But due to various unforeseen circumstances, petitioner finds it
difficult to Commission their 3 MW Solar PV Project by March 2015 primarily
due to following reasons:1.
SBPDCL has to provide Grid Connectivity and Evacuation arrangement
for the Solar Power Plant as per provision in the Bihar policy,2011.
The plant capacity of the proposed solar PV plant is 3 MW and PPA
has been signed on 17.09.2012 for supply of 4.94MU per annum to
SBPDCL at delivery point. Thus, the petitioner has offered entire plant
capacity to SBPDCL and therefore, claims to qualify for benefits under
the said clause of RE Policy 2011 of the State Govt. for grid interfacing
and evacuation arrangement.
Petitioner has been making regular submission since last two years to
SBPDCL,BSPHCL and BSPTCL for arranging for Grid Interfacing and
evacuation arrangement but no order has so far been issued by the
respondents.
2.
Issues relating to Capacity Utilization Factor was raised by the
BSPHCL and clarification from Energy Department, Government of
Bihar was requested vide letter No. 889 dated 29.032014 regarding
interpretation of clause 4.2.3 of RE Policy 2011.
This matter was brought to the notice of BERC and the Commission
issued advisory on 10.09.2014 to Energy Department, Govt. of Bihar
stating there in that Compliance of 50% of power supply subject to
minimum of 2 MW should be based on the supply of electricity at
PLF/CUF approved by BERC for the project, depending on source of
renewable energy. The project developers shall be eligible for incentive
under the policy if above compliance is achieved.
The respondent SBPDCL has not permitted the petitioner even to
construct the 33 KV evacuation arrangement of their own and erect
the bay & set up the PT, CT breaker and switches, metering etc in the
67
Sub-Station of Nawada GSS for evacuation of power from the plant.
Finding no way out, petitioner has started construction of 2.5 km of 33
KV line and more than 52 poles have already been erected. Extension
of Gantry and construction of cable trenches etc may take some time
in making all arrangements for grid connectivity.
Petitioner has claimed that they are importing solar modules from
china and first lot has already arrived at Kolkata port. EPC contract
has been awarded and Order for SMA Inverter with in-built
Transformer and SCADA system has been placed on a German firm.
The import of modules and inverters require MNRE permission for
relief in import &other duties and the same is awaited.
3. The petitioner was making all out efforts for debt/funding of the
project from the banks/financial institutions. First annual integrated
rating for BSPHCL (under the rating for distribution utilities) under
integrated rating formulated by Ministry of Power, Govt. of India
,carried out by independent agencies ICRA &CRISIL, has been awarded
B grade which is below average operational financial performance
capability. This matter was raised before CMD cum Secretary, Energy
Deptt. There has been meeting and correspondences with banks/
financial institutions but nothing tangible happened. Under the
circumstances, petitioner had to seek finance with co-laterals, etc and
finally financial closure was made and a good deal of time was lost
which has resulted in delay in timely delivery of materials and
equipments.
4. As the commissioning schedule of the project was delayed, extension of
time for commissioning of the project was sought from SIPB. Matter
was also raised several times in the meeting of SIPB. The SIPB vide
letter no 289 dated 10.02.2015 mentioned that since the matter
regarding deciding the issue of Commercial Date of Operation (COD)
relates to Energy Deptt. Govt of Bihar, necessary decision into the
68
matter will be taken by the Energy Department and communicated to
SIPB. The same is still awaited.
6.2.2
The Commission has considered various reasons for delay submitted
by the petitioner and views that:1.
The issue of relating to erection of transmission and evacuation
arrangement and interpretation of clause 4.2.3 of Bihar Policy for
Promotion of New & Renewable Energy Sources,2011 is an exercise
which could have been done side by side along with the erection of the
power plant at site. These are parallel activity of the project. The
exercise of seeking interpretation of clause 4.2.3 of the Bihar
Policy,2011 regarding funding of evacuation infrastructure did not
prevent the petitioner in any way from erecting the Power Plant. Since
the project is not ready for evacuating power, in spite of delay in
construction of evacuation system, petitioner cannot blame others for
the delay in plant erection.
2.
Petitioner has also raised the issue of funding of the project.
Mobilisation of necessary funds for the project is necessarily the
responsibility of the project developer and not so much of the
respondent BSPHCL. Still meeting of Bankers and Solar Power
Developers was called by BSPHCL and they interacted with various
financial institutions to finance the projects in Bihar. This reason
cannot be said to be beyond the control of the petitioner.
3.
Petitioner has claimed that they are importing solar modules from
china and first lot has already arrived at Kolkata port. EPC contract
has been awarded and Order for SMA Inverter with in-built
Transformer and SCADA system has been placed on a German firm.
The import of modules and inverters require MNRE permission for
relief in import & other duties and the same is awaited.
Subsequently after completion of the hearing, additional information
dated 10.04.2015 as evidence of expenditure incurred has been
69
submitted. Petitioner has certified that as on 27.3.2015 Rs.9.0 Crores
have been spent for the 3 MW Power Plant.
Petitioner has also submitted a copy of Bill of Lading and a certificate
mentioning invoice no.20150123/2-LE_VO dated 23.1.2015 for 84
pallets of solar modules showing M/s Glatt Solutions Pvt. Ltd as
consignee. Copies of delivery challans of 33 KV cables -1033 Mtrs and
10 km of “DOG’ conductor have also been enclosed.
To make one understand that project will be completed within next 3
months, the present status of the contract should have been
mentioned.
The
details
of
expenditure
incurred
supported
by
corroborative evidence should have been submitted for consideration
of the Commission.
4.
Perusal of the additional submissions indicate that EPC contract was
signed on 17.10.2014 after a lapse of over two years from the date of
PPA(17.09.2012).For the delay petitioner has not mentioned any
reason. This delay is fully attributable to the petitioner themselves.
The project capital cost for solar PV has been reduced twice by the
CERC during the period indicating reduction in market price of solar
PV modules and the petitioner must have done due diligence to award
EPC contract on the then prevailing market price and not on the price
prevailing in March 2013 when PPA as signed at a tariff of Rs.
10.90/kWh and therefore, the petitioner cannot claim the benefit of
higher tariff now.
Consequent upon EPC contract dated 17.10.2014, the power plant
was to be commissioned within 22 weeks after agreement as per
schedule 5 of the contract. If the detailed payment terms and LC
conditions are not be agreed until November 2014, the commissioning
date was to be delayed according to the delay of payment terms. The
execution of EPC is to be launched after the first down payment is
transferred to the account of VISPIRON as mention in payment
schedule 6(a).
70
But petitioner has not informed whether the supplier has been granted
extension of time or contract has been revised at new terms and what
is the actual status has not been mentioned.
Petitioner has not
submitted any document to claim that Plant and machinery has
reached the site and activity milestone required to be completed after
18 months as per provisions of Bihar policy, 2011 has been achieved.
The available information in the petition and subsequent submissions
fail to satisfy that if the control period is not extended, the petitioner is
likely to suffer or incur loss especially when a capital cost reduction
trend is prevailing in solar PV market in the past years.
5.
BREDA, the nodal agency for monitoring all New and Renewable
projects approved by SIPB as provided in Bihar Policy,2011 has
submitted a status report vide letter no.592 dated 15.4.2015.
According to this report M/s Glatt Solutions Pvt Ltd has acquired 25
acres of land, completed boundary construction, Site filling and
levelling and temporary shed construction. Civil work like warehouse,
guard room & control room constructed, 33KV transmission line 3.5
km erected. Ramming for structural post is in progress. Order for
cables, dog conductor, solar modules & structures are place whereas
partially materials are already dispatched to site.
The above status report does not indicate that power plant is nearing
completion stage.
6.
Petitioner has further mentioned that SIPB Vide letter no.289 dated
10.02.2015 has mentioned that issues related to COD are to be
decided by Energy Deptt. However, Commission has received a copy of
consent for extension of COD up to 30.06.2015 by the Energy Deptt.,
Bihar vide letter no 675 dated 4.3.2015
7.
The EPC contract was signed on 17.10.2014 after lapse of two years
from the PPA. By this time capital cost of solar PV projects reduced
substantially. The Commission had already revised tariff of solar PV
project for FY 2013-14 vide order issued by the Commission on
71
14.06.2013. Subsequently CERC in its order No. SM 353/2013 dated
15.05.2014 has further reduced the benchmark capital cost for FY
2014-15. Consequently the Commission has also issued generic
levelised tariff for Solar PV projects for FY2014-15 at the rate of
Rs7.69/Kwh. This tariff shall remain applicable till a new tariff for
Fy2015-16 is determined by the Commission. In the meanwhile, CERC
has further reduced the proposed capital cost of Solar PV projects
fromRs.691 lakhs/MW forFY2014-15 to Rs.587lakhs/MW for Fy201516.
The delay in signing EPC contract for over two years by the petitioner
has caused such a situation where due to reduction in capital cost in
the past consecutive years, presently applicable generic tariff for the
projects to be commissioned by this time has come down to
Rs.7.69/kwh.
Recently, BSPHCL has executed PPAs with solar PV project developers
for an aggregate capacity of 100MW through tariff based competitive
bidding process. The tariff in the PPAs vary between Rs. 7.87/kwh and
Rs. 8.73/Kwh.
In addition to the above, BSPHCL has also executed PPA with the Solar
Power Corporation of India for supply of 10 MW of Solar PV power at a
tariff of Rs5.50/Kwh under JNNSM batch-II, phase -1.
8.
Petitioners have quoted APTEL's Order dated 02.01.2013 in Appeal
Nos.96 and 130 of 2012 wherein it is recorded that "It is the
Commission which is alone competent to scrutinize the merits and
demerits of each fact. It has to find as to whether expenditures were
made or committed ahead of the date of Commissioning of the project
so that no unfair advantage is claimed by any developer on the ground
of prospective reduction of capital cost. If the particulars of
expenditure already made or committed during the control period are
scrutinized and grants are scrutinized in the perspective of each
individual case then possibly it would be clear to the Commission as to
72
whether and in which case a developer comes with clean hands or
not."
Subsequent to order of Hon'ble APTEL, an appeal was filed by GUVNL
before the Hon'ble Supreme Court in which Hon'ble Supreme Court
has held as under :"We are not inclined to interfere with the order passed by
the Appellate Tribunal for Electricity. The civil appeals are,
accordingly, dismissed. We, however, make it clear that
the Commission shall decide the whole issue without
being influenced by the observation made by the
Appellate Tribunal for Electricity in accordance with law."
In compliance of the order of Hon'ble Supreme Court, Gujarat
Electricity Regulatory Commission (GERC) passed an order extending
the control period for the project of one petitioner. However, the facts
of Gujrat case which have been quoted here are totally different from
the present case. In case of Gujrat project, the solar power plant had
already been erected and was waiting for the transmission line to
evacuate power generated by the plant. Even before the erection of the
plant, there was delay in land acquisition in that case due to change of
government policy regarding land. In the present case, there is no
change of government policy affecting the project. Moreover the power
plant is not ready and respondent BSPHCL cannot be blamed for not
providing evacuation facility when the power plant itself is not
constructed.
9.
If a petitioner/developer is not able to commission the plant within the
control period, they are entitled to the generic tariff for the project as
determined by the Commission during the subsequent control period
as applicable on their COD.
Module prices in international market continue to decline. There is a
reduction in benchmark capital cost of solar PV projects in last
successive years notified by the CERC. Benefit of reduction in capital
73
cost of the project due to delay in procurement and commissioning of
the project should be passed on to the consumers.
Extension of control period for the project of the petitioner at a
levelised tariff of Rs. 10.90/kwh will amount to giving undue benefit to
the petitioner and amounts to abuse of the process of the Commission.
Therefore, the Commission does not find any justification for extending
the control period for the project of the petitioner.
7.0
Case No.15/2015 :
Submission of Alex Green Energy Private Limited
7.1.1
The petitioner has submitted a petition on 26.2.2015 for extension of
control period of the order no.12/2012 dated 29.05.2012 of the Commission
and the Scheduled Commercial Operation Date(SCOD) of the PPA dated
1.3.2013 . The control period is expiring on 31st March, 2015. Petitioner has
submitted achievements till date and reasons of delay. It has been stated that
reasons of delay are beyond their control and prevent them to achieve
Commercial Operation Date (COD) by 31st March, 2015.
Petitioner has submitted to have achieved the following:(1)Private Land of approximately 55 Acre has been purchased.
(2) Registration of Land is complete.
(3) Mutation and Conversion of Land is complete.
(4) The Geo-technical, Soil and Contour Analysis has been concluded
(5) Land Development activities has been initiated.
(6) We have applied and received the requisite clearance from the Bihar State
Pollution Control Board.
(7) Complete Engineering Procurement and Construction (EPC) Contract has
been awarded.
(8) All preliminary planning, designing and strategising for the project has
been completed.
(9) Grid Connectivity and Evacuation Permission and Transmission Line
Diagram have been approved and received.
(10) Advances to various vendors have been furnished.
74
7.1.2
Petitioner has further submitted that following reasons for delay in
execution of the project:When the "Executed PPA" and the "Bihar Policy for Promotion of New
and Renewable Energy Sources,2011" are read in conjunction, the following
ambiguities are faced which prevent execution of the project:Who shall issue the work order for the construction of the project,
BSEB or Developer?
Does the Developer make the expenses and get reimbursed by BSEB or
BSEB directly issues work orders and makes the expenses?
In case BSEB takes upon the responsibility to construct the
Transmission Line, then does it also carry the responsibility to complete the
evacuation infrastructure within the Schedule Commissioning Date.
7.1.3
Petitioner has requested to extend the Control Period of the Order
No.12/2012 of 29th May, 2012 and the SCOD of the Power Purchase agreement
dated 1st March, 2013 to enable them to complete this project in a viable time.
The project is located in one of the most backward district of Banka, which also
makes it more useful for the social-impact on the locals.
Further, petitioner has requested to direct the Bihar Government and
its agencies to expedite various approvals and permissions like right of way,
transmission work, bay work at substation which is becoming the biggest hurdle
in executing the project.
After completion of hearing, petitioner in a subsequent submission on
30.3.2015 has requested 9 months extension of control period of the order
no.12/2012 of 29.5.2012 and SCOD of PPA dated 1.03.2013.
8.0
Commission’s analysis, views and findings:-
8.1.1
Petitioner's submission and status report submitted by BREDA were
analysed by the Commission and Commission views the following :1.
Petitioner has signed PPA on 1.03.2013 for 10 MW Solar PV Power
plant at Banka. Petitioner has further submitted that they have
purchased 55 acres of land and have obtained clearance from Bihar
75
State Pollution Control Board. EPC contract has been awarded and
advances to various vendors have been furnished.
2.
Petitioner has submitted that Grid Connectivity and Evacuation
permission and transmission line diagram have been approved. But
the work order for construction of evacuation system has not been
issued. It is not clear who will construct the transmission line and
evacuation arrangement BSPHCL or the petitioner. Does the Developer
make the expenses and get reimbursed by BSEB or BSEB directly
issues work orders and makes the expenses?
In case BSEB takes upon the responsibility to construct the
Transmission Line, then does it also carry the responsibility to
complete
the
evacuation
infrastructure
within
the
Schedule
Commissioning Date.
3.
Petitioner has requested to direct the Bihar Government and its
agencies to expedite various approvals and permissions like right of
way, transmission work, bay work at substation which is becoming the
biggest hurdle in executing the project.
4.
Petitioner in a subsequent submission dated 30.3.2015 has prayed to
extend control period by 9 months
for commissioning of Solar PV
plant and evacuation of Power to grid as per PPA at the generic
levelised tariff and other terms and conditions as determined by the
Commission in its order no.12/2012 dated 29.05.2012.
8.1.2
The reason forwarded by the petitioner for delay in execution of the
project are mainly the following:1.
It is not clear Who has to issue the work order for construction of the
project BSPHCL or Developer. Does the developer make expenses and
get reimbursed by BSPHCL or BSPHCL issues the work order and
make expenses.
The plant capacity of the proposed solar PV plant is 10 MW and PPA
has been signed on 1.3.2013.
76
2.
Petitioner has also stated that various approvals and permission like
right of way, transmission work, way work at substation are the
biggest hurdle in execution of the project the issue of funding of the
project.
8.1.3
The Commission has considered the reasons for delay submitted by
the petitioner and views that:1. The issue of relating to erection of transmission and evacuation
arrangement and interpretation of clause 4.2.3 of Bihar Policy for
Promotion of New & Renewable Energy Sources,2011 is an exercise
which could have been done simultaneously as a parallel activity along
with the erection of the power plant at site. The exercise of seeking
interpretation of clause 4.2.3 of the Bihar Policy, 2011 regarding
funding of evacuation infrastructure did not prevent the petitioner in
any way from erecting the Power Plant. Since the project is not ready
for evacuating power, in spite of delay in construction of evacuation
system, petitioner cannot blame others for the delay in plant erection.
2.
As per provision of Bihar Policy, 2011 and PPA, Consent, clearances
and permissions required for the project execution has to be arranged
by the developer for timely commissioning of the project Mobilisation
of necessary funds for the project is also the responsibility of the
project developer. This reason cannot be said to be beyond the control
of the petitioner.
3.
Date of EPC contract has not been submitted. Even after lapse of over
two years from the date of PPA (1.03.2013), petitioner has not
mentioned present status
of the EPC contract and reason for this
delay. The project capital cost for solar PV has been reduced twice by
the CERC during the period. Petitioner has delayed erected of power
plant. As the Power Plant is not ready for evacuation, any difficulty or
confusion in erection of transmission and evacuation arrangement
cannot be blamed for the delay of Power plant.
77
4.
Petitioner has not submitted any document nor has claimed that Plant
and machinery has reached the site and activity milestone required to
be completed after 18 months as per provisions of Bihar policy, 2011
has been achieved.
The available information in the petition and subsequent submissions
fail to satisfy that if the control period is not extended, the petitioner is
likely to suffer or incur loss especially when a capital cost reduction
trend is prevailing in solar PV market in the past years.
5.
BREDA, the nodal agency for monitoring all New and Renewable
projects approved by SIPB as provided in Bihar Policy,2011, has
submitted a status report vide letter no.592 dated 15.4.2015.
According to this report M/s Alex Green Energy Pvt Ltd has procured
land and financial closure has been achieved.
The above status report does not indicate that power plant is nearing
completion stage.
6.
Petitioner has further mentioned that SIPB Vide letter no.289 dated
10.02.2015 has mentioned that issues related to COD are to be
decided by Energy Deptt, which is still awaited. However, Commission
has received a copy of consent for extension of COD up to 30.09.2015
by the Energy Deptt, Bihar vide letter no 1164 dated 10.4.2015
7.
The Commission had already revised tariff of solar PV project for FY
2013-14 vide order issued by the Commission on 14.06.2013.
Subsequently CERC in its order No. SM 353/2013 dated 15.05.2014
has further reduced the benchmark capital cost for FY 2014-15.
Consequently the Commission has also issued generic levellised tariff
for Solar PV projects for FY2014-15 at the rate of Rs7.69/Kwh. This
tariff shall remain applicable till a new tariff for Fy2015-16 is
determined by the Commission. In the meanwhile, CERC has further
reduced the proposed capital cost of Solar PV projects from Rs.691
lakhs/ MW forFY2014-15 to Rs.587lakhs/MW for Fy2015-16.
78
Recently, BSPHCL has executed PPAs with solar PV project developers
for an aggregate capacity of 100MW through tariff based competitive
bidding process. The tariff in the PPAs vary between Rs. 7.87/kwh and
Rs. 8.73/Kwh.
In addition to the above, BSPHCL has also executed PPA with the Solar
Power Corporation of India for supply of 10 MW of Solar PV power at a
tariff of Rs5.50/Kwh under JNNSM batch-II, phase -1.
8.
In a similar case for extension of control period, Hon’ble APTEL in its
Order dated 02.01.2013 in Appeal Nos.96 and 130 of 2012 has
observed that "It is the Commission which is alone competent to
scrutinize the merits and demerits of each fact. It has to find as to
whether expenditures were made or committed ahead of the date of
Commissioning of the project so that no unfair advantage is claimed by
any developer on the ground of prospective reduction of capital cost. If
the particulars of expenditure already made or committed during the
control period are scrutinized and grants are scrutinized in the
perspective of each individual case then possibly it would be clear to
the Commission as to whether and in which case a developer comes
with clean hands or not."
Subsequent to order of Hon'ble APTEL, an appeal was filed by GUVNL
before the Hon'ble Supreme Court in which Hon'ble Supreme Court
has held as under :"We are not inclined to interfere with the order passed
by the Appellate Tribunal for Electricity. The civil
appeals are, accordingly, dismissed. We, however,
make it clear that the Commission shall decide the
whole
issue
observation
without
made
by
being
the
influenced
Appellate
by
Tribunal
the
for
Electricity in accordance with law."
In compliance of the order of Hon'ble Supreme Court, Gujarat
Electricity Regulatory Commission (GERC) passed an order extending
79
the control period for the project of one petitioner. However, in case of
Gujrat project, the solar power plant had already been erected and was
waiting for the transmission line to evacuate power generated by the
plant. Even before the erection of the plant, there was delay in land
acquisition in that case due to change of government policy regarding
land. In the present case, there is no change of government policy
affecting the project. Moreover the power plant is not ready and
respondent BSPHCL cannot be blamed for not providing evacuation
facility when the power plant itself is not constructed.
9.
If a petitioner/developer is not able to commission the plant within the
control period, they are entitled to the generic tariff for the project as
determined by the Commission during the subsequent control period
as applicable on their COD.
Module prices in international market continue to decline. There is a
reduction in benchmark capital cost of solar PV projects in last
successive years notified by the CERC. Benefit of reduction in capital
cost of the project due to delay in procurement and commissioning of
the project should be passed on to the consumers
10. Extension of control period for the project of the petitioner at a
levelised tariff of Rs. 10.90/kwh will amount to giving undue benefit to
the petitioner and amounts to abuse of the process of the Commission.
Therefore, the Commission does not find any justification for extending
the control period for the project of the petitioner.
Sd/(S.C.Jha)
Member
Sd/(U.N. Panjiar)
Chairman
80