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A petition has been filed under Section 86(1)(f) of the Electricity Act, 2003, along with Article 10 of the Power Purchase Agreements (PPAs) signed between the petitioner and the respondent. The petitioner is seeking an order directing the respondent to refund the amount equivalent to 25% of the proceeds from the sale of Verified Emission Reductions (VERs) for the period between March 13, 2007, and January 14, 2009, as well as a late payment surcharge that was allegedly wrongfully deducted by the respondent for 88.8 MW wind projects. The deduction was reportedly made under the Clean Development Mechanism (CDM) provisions, as specified in Article 12.12 of the PPAs.
The petitioner explained that the petition was filed to seek refunds and directions from the Commission, specifically regarding amounts deducted in 2017 for VER sales. The respondent, Gujarat Urja Vikas Nigam Limited (GUVNL), had initially requested a 25% share of CDM benefits in 2010, and the petitioner complied with this. However, in 2017, GUVNL stopped accepting invoices unless they included details of the issuance and sale of Carbon Emission Reductions (CERs)/VERs. The petitioner provided the required information through a “CDM Declaration Statement” in June 2017, but the respondent later claimed that they had not received a payment of ₹85,93,997.
The petitioner clarified that the agreements only required them to share 25% of CDM benefits, not VER benefits. Despite this, GUVNL continued to demand a share of the VER benefits for the period between March 13, 2007, and January 14, 2009, even though there was no contractual or legal obligation to do so. The petitioner reiterated this position in a letter dated August 22, 2023, but GUVNL continued to request the refund of VER benefits.
GUVNL had made deductions for VER benefits in the invoices of August 2017, even though the petitioner had previously shared the 25% share of CERs following the PPAs. The petitioner emphasized that the demand for VER benefits was a new request that GUVNL had made in 2017, and this demand was made without any prior indication in earlier years. Additionally, the petitioner argued that GUVNL had miscalculated interest, using March 2010 as a reference for the interest calculation, which did not reflect the actual situation.
The petitioner cited a judgment from the Hon’ble Supreme Court in the case of Andhra Pradesh Power Coordination Committee v/s Lanco Kondapalli Power Limited, arguing that the matter fell within the statute of limitations and that the delay in filing the petition should not affect the merits of the case.
On the other hand, the respondent, GUVNL, contended that the petition was filed late, as it was filed seven years after the deductions occurred in 2017. They argued that the petitioner was seeking to avoid sharing the proceeds from trading carbon offset credits, as required under the PPA, and that the petition should be dismissed as time-barred. The respondent also noted that the petitioner had previously accepted the obligation to share VER benefits in 2020, which undermined their current claims for a refund. Furthermore, the respondent argued that the delayed disclosure raised concerns about transparency, suggesting that the petitioner may be withholding information to gain an advantage.
Both parties presented their arguments, with the petitioner requesting a refund of Rs. 85,93,997 along with interest for the period since March 2010. The respondent contended that the petitioner had accepted the requirement to share the VER benefits in the past and that the petition lacked merit.
The Commission noted that the petitioner had filed the petition under the relevant sections of the Electricity Act and PPAs, seeking a refund of the amounts wrongly deducted for the sale of VERs. After hearing both parties, the matter was reserved for an order. Both parties were allowed to file their final submissions within two weeks.
