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KERC Proposes for Development of 1200 MWA of Solar Power in 60 Taluks: Supreme Court 

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On 20.11.2015 the Karnataka Renewable Energy Development Limited (KREDL) issued a request for a proposal from the bidders for undertaking the development of Solar PV ground mount Power Plants in Karnataka for the development of 1200 MWA of Solar power to be implemented in 60 Taluks. Emmvee Photovoltaic Power Pvt. Ltd. (respondent No. 2 herein). The company incorporated two Special Purpose Vehicles (SPV) following the terms of the Request for Proposal and submitted its bid for acceptance by the first Appellant, Bangalore Electricity Supply Company Limited.

On 31.03.2016 the projects were given to the respondent. And on 23.05.2016 parties entered into the Power Purchase Agreements (PPAs). It was therefore approved by Karnataka Electricity Regulatory Commission (KERC) on 17.10.2016.

A Commissioning Certificate was issued on 25.10.2017 by KPTCL for the Bidar Project and furtherly a Commissioning Certificate for Bagpalli Project was also issued on 23.11.2017.

Petition No. 19 of 2018 was filed by the Respondents in Civil Appeal 9273/2019 in respect of the Solar PV ground mount Power Project in Bidar for reliefs like those claimed in OP 18 of 2018.The Karnataka Electricity Regulatory Commission by its Order dated 23.10.2018 dismissed OP No. 18/2018 and OP No. 19/2018. The Karnataka Electricity Regulatory Commission framed four issues for consideration. The issues raised were answered in length. The Respondents approached the Appellate Tribunal for Electricity by filing Appeal Nos.332/2018 and 333/2018.

According to the Tribunal, synchronization took place before the commissioning of the Plant. It also observed that the Scheduled date of Commissioning was done within the time limit prescribed under the agreements even if the commencement of the Solar Plants was taken as 17.10.2017. The Appellate Tribunal for electricity allowed the Appeals filed by the Respondents and set aside the orders passed by the Karnataka Electricity Regulatory Commission.

Appellant’s Contentions

The learned Solicitor General was critical of the judgment of the Appellate Tribunal for its interference with a well-considered order of the Commission. He argued that the conclusion of the Appellate Tribunal that the SCOD was on 17.10.2017 and not on 16.10.2017 which was contrary to the terms of the PPA. He relied upon several clauses of the PPA to justify the decision taken by the Appellant to impose liquidated damages and to reduce the tariff to 4.36/kWh from 6.10/kWh. He emphasized that injection of power to the Grid was a prerequisite for determining the date of commissioning of a Solar Plant. He urged that the Tribunal committed an error in relying upon judgments relating to the General Clauses Act when PPA excluded the applicability of the General Clauses Act.

Mr Balaji Srinivasan took us through the documents to argue that the regulatory commission correctly interpreted the agreement to include the first date and last date. The learned counsel representing the appellant contended that the 12 months period for deciding the Scheduled Commissioning Date starts from 17.10.2016 which was the date of approval of PPA by KERC.

Further, the appellant contended that the actual injection of power into the grid was on 17.10.2017 and as the Scheduled was on 16.10.2017, the reduction of the tariff given the delay of 1 day in commissioning is justified. The alternate submission by the Respondents was that even assuming that the Scheduled Commissioning date was 16.10.2017 and not 17.10.2017, the Respondents commissioned the Solar Plants on 16.10.2017 itself.

According to the respondents, the Appellant committed an error in penalizing the respondents on the wrong premise that the actual injection of power was required to show that the Solar Plants were commissioned.

Court’s Observation

The Court observed that there was no dispute that the power was injected from the solar plants on 17.10.2017.

The Court observed that the issue related to the Scheduled Commissioning Date being 17.10.2017 and said that it was not necessary to adjudicate the point relating to the requirement of actual injection of power into the Grid to decide the date of commissioning.

Court’s Decision

The Court for the aforesaid reasons upheld the judgment of the Appellate Tribunal and dismissed the Appeals.

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