Reading Time: 3 minutes
Ostro Kutch Wind Power Limited (Petitioner) has recently filed a petition, seeking resolution of a dispute arising from the actions of Power Grid Corporation of India (PGCIL). The dispute revolves around PGCIL’s request for the opening of a Letter of Credit (LC) in favor of PGCIL for Point of Connection (PoC) charges related to the unutilized Long-Term Access (LTA) for a 50 MW capacity.
The Petitioner, engaged in setting up a 300 MW Wind Farm in Gujarat, applied for connectivity to the interstate transmission system in 2016. PGCIL granted connectivity and directed the Petitioner to sign necessary agreements. The Petitioner also secured a Letter of Award in 2017 for a 250 MW wind power project.
Later, the Petitioner applied for Long-Term Access (LTA) to evacuate 300 MW, with 50 MW allocated to the Northern Region and 50 MW to the Western Region. PGCIL operationalized the LTA in stages, with the final 50 MW becoming operational in April 2019.
However, PGCIL subsequently asked the Petitioner to furnish an irrevocable Letter of Credit for PoC rates. The Petitioner, having secured a Letter of Award for an additional 50 MW capacity, requested a waiver of PoC charges until the commissioning of this capacity. The dispute arose when PGCIL insisted on the Letter of Credit.
The Petitioner argued for an exemption from transmission charges and LC opening until the commissioning of the additional 50 MW, stating its intention to complete the project by December 2022. Due to disruptions caused by the COVID-19 pandemic, the Scheduled Commercial Operation Date (SCOD) for the additional 50 MW was extended to December 2022.
PGCIL, in response, asserted that the Petitioner did not qualify for exemption from ISTS transmission charges and LC opening under the prevailing regulations. PGCIL highlighted the Petitioner’s responsibility to follow the prescribed process for exemption.
In subsequent developments, the Petitioner sought an amendment to the prayer, citing the revision of SCOD to September 2022. The dispute escalated with CTUIL raising transmission charge bills, prompting the Petitioner to challenge the legality of the bills under the repealed 2010 Sharing Regulations.
The regulatory commission examined the arguments from both sides. It emphasized that the Petitioner’s obligation under Power Purchase Agreements (PPAs) and Long-Term Access (LTA) agreements were distinct. The commission found no merit in the Petitioner’s request to align LTA operationalization with the extended SCOD.
Regarding transmission charge bills, the commission ruled that the Petitioner was liable under the 2010 Sharing Regulations for the period up to October 2020 and under the 2020 Sharing Regulations from November 2020. It directed the Petitioner to pay the outstanding bills.
The commission also criticized CTU for delaying bill issuance and provided a directive for timely billing in the future. As the Petitioner had already achieved the Commercial Operation Date for the 50 MW capacity, the need for further LC opening for regular bills under the 2020 Sharing Regulations was deemed unnecessary. The regulatory commission disposed of the petition, emphasizing the Petitioner’s responsibility for synchronization between PPAs and LTA agreements. It also addressed the delayed billing issue and confirmed the Petitioner’s liability for transmission charges under applicable regulations.
Please view the document below for more details.
