MERC Directs MSEDCL To Compensate Bothe Windfarm

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Maharashtra Electricity Regulatory Commission (MERC)  recently passed an order regarding Case of Bothe Windfarm Development Pvt. Ltd. seeking directions against Maharashtra State Electricity Distribution Limited for executing Energy Purchase Agreement for supply of power from the it’s 6.3 MW Wind Turbine Generators.The location of this project is at Satara, Maharashtra. 

Bothe Windfarm Development Pvt. Ltd. (BWDPL) filed a Case on 27 January 2020 seeking directions against Maharashtra State Electricity Distribution Company Ltd. (MSEDCL).Main Prayers of BWDPL where to Direct MSEDCL to comply with its Wind Policy, 2014 and the Government of Maharashtra’s RE Policy, Direct MSEDCL to pay an amount of Rs. 41,35,33,733 as compensation to the Petitioner towards power supplied from the Petitioner’s three WTGs to MSEDCL from December, 2014 till 23.01.2020,Direct MSEDCL to pay tariff at the rate of Rs. 5.70/ kWh for the power supplied by the Petitioner to MSEDCL for the period beyond 23.01.2020 alongwith interest/ late payment surcharge at the rate of 15% per annum till realisation.

BWDPL has set up a 199.7 MW wind farm in Satara district which is the largest single site wind project undertaken by an Independent Power Producer (IPP) in Maharashtra. The entire Project has been commissioned in phases starting from May 2013 till 30 December 2014. Four WTGs (aggregating 8 MW) of BWDPL were commissioned in the year 2013 in terms of New Policy of Government of Maharashtra (GoM) for Generation of Power from Non-conventional sources of Energy, 2008 (RE Policy 2008). In FY 2013-14 itself, the entire capacity of 2000 MW envisaged under the RE Policy 2008 was exhausted. 

On 3 June 2014, MSEDCL notified its Wind Policy, 2014 which states that wind generators that MSEDCL would execute EPAs in chronological order based on the date of commissioning of WTGs and  Wind Policy, 2014 did not require the wind project developers to register their Projects with any Nodal Agency prior to execution of EPAs with MSEDCL.

From March 2014 to August 2014, BWDPL and MSEDCL executed EPAs for 101 MW capacity. 4.4 During the year 2014, BWDPL commissioned the remaining capacity of its Project i.e. 191.7 MW including the three WTGs aggregating 6.3 MW .

MSEDCL had failed to execute EPAs with BWDPL for the capacity of 98.7 MW and hence BWDPL registered their project under the RE Policy, 2015 in order to ensure that its Project does become stranded. 

On 23 January 2020, Chief Engineer RE, MSEDCL has issued an e-mail to its Superintending Engineer, Satara directing him to immediately disconnect the three WTGs from the grid in light of the fact that MSEDCL has not executed EPAs with BWDPL for the three WTGs. 

MSEDCL has stated that its wind power policy of 3 June 2014 was kept in abeyance on 12 February 2015 (w.e.f 6 February 2015). This does not impact the entitlement of BWDPL’s 6.3 MW capacity which was commissioned in December, 2014, i.e, prior to this policy being kept in abeyance. MSEDCL itself issued clarification on 26 September 2014 that no registration/clearance will be required from MEDA for commissioning of wind turbines.BWDPL’s three WTGs fall within 1500 MW capacity earmarked under the RE Policy 2015 for mandatory tie up with MSEDCL. MEDA  affirmed in its response dated 9 January 2020 to a query made under the RTI Act. 

BWDPL’s claim for EPA execution arises from the very fact that both MSEDCL’s Wind Policy 2014 as well as the RE Policy 2015 guarantee EPA execution once all the prerequisites contained in the said Policies are met but MSEDCL’s contention that it cannot be compelled to execute EPAs with BWDPL for the three WTGs is incorrect in light of the fact that an implied agreement is already in place between MSEDCL and BWDPL.

MSEDCL contended that it has sought relief in all RPO proceedings that its RPO compliance ought to be considered on the basis of contracted RE and not actual RE injected into the grid which was allowed by the Commission. This contention of MSEDCL was found incorrect and  was based on a selective reading of the various RPO compliance Orders passed by the Commission.

After studying the matter the commission passed an order that Maharashtra State Electricity Distribution Company Limited cannot be compelled to sign Energy Purchase Agreement with Bothe Windfarm Development Pvt. Ltd. for its 3 WTGs aggregating 6.3 MW. Commission also directed Maharashtra State Electricity Distribution Company Limited to compensate Bothe Windfarm Development Pvt. Ltd. for the energy injected from 3 WTGs aggregating 6.3 MW during FY 2014-15 to FY 2016-17 which is considered for fulfilment of non-Solar RPO targets, at Average Power Purchase Cost (excluding Renewable Energy) plus floor price of non-solar REC applicable for respective year. The court stated that such compensation would be without any carrying cost. 

The commission declines any compensation to Bothe Windfarm Development Pvt. Ltd as energy injected since April, 2017 was procured in the absence of a valid Energy Purchase Agreement. 

For more information please refer to order below:

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