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In a recent development, the Punjab State Power Corporation Ltd. (PSPCL) has sought a reduction in tariff by ₹0.50 paisa/kWh per day for a delayed period related to a Power Purchase Agreement (PPA) dated 29.12.2017. This agreement involved the purchase of 50 MW of wind power from Adani Green Energy (MP) Limited (AGEMPL).
PSPCL, a distribution licensee in the State of Punjab, claims that AGEMPL was obligated to commission the project by 03.05.2019 or, in any case, not later than 03.02.2020. The commissioning, however, took place on 07.03.2020, leading to a delay of approximately 10 months beyond the original scheduled commissioning date. PSPCL argues that as per the PPA, any delay beyond 27 months from the date of issuance of the Letter of Award (LoA) should result in a reduction of tariff at the rate of 0.50 paise/kWh per day.
AGEMPL, a company engaged in the generation and sale of renewable energy, counters PSPCL’s claim by stating that the PPA between AGEMPL and Solar Energy Corporation of India Limited (SECI) does not provide for a reduced tariff due to project commissioning delays. AGEMPL emphasizes that the extension of the Scheduled Commercial Operation Date (SCoD) to 03.01.2020 was granted by SECI in response to the non-operationalization of Long-Term Access (LTA) by the Central Transmission Utility (CTU), a force majeure event beyond their control.
SECI supports AGEMPL’s position, stating that the extension of the SCoD was based on MNRE’s directions. SECI contends that PSPCL’s claim lacks merit, as the project was commissioned within the extended timeline, and liquidated damages were already imposed for the delay.
The regulatory commission, after hearing the arguments from all parties, observed that if a developer is prevented from performing obligations due to force majeure events, the SCoD and Expiry Date of the PPA can be deferred for a reasonable period without financial implications. The commission noted that the extension of SCoD was validly granted, and the project commissioning fell within the permissible timeline.
The commission emphasized that the provisions of the PPA should be read harmoniously, and the 27-month deadline for tariff reduction should be calculated from the revised SCoD, i.e., 03.01.2020. It acknowledged that liquidated damages had already been imposed by SECI for the delay, and a reduction in tariff could only be applied from 03.07.2020, a date beyond the project commissioning. In conclusion, the commission dismissed PSPCL’s claim for tariff reduction, stating that AGEMPL cannot be subject to additional penalties as it has already paid liquidated damages following the PPA. The project commissioning delay was deemed acceptable within the extended timeline, and the issue was resolved in favor of AGEMPL.
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