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Guttaseema Wind Energy Company, a developer of an 80 MW wind power project in Andhra Pradesh, had approached the Appellate Tribunal for Electricity to challenge a regulatory decision. The appeal was against the order passed by the Andhra Pradesh State Electricity Regulatory Commission (APERC) that upheld the partial termination of the Power Purchase Agreement (PPA) signed between the company and the Southern Power Distribution Company of Andhra Pradesh (SPDCL). The dispute centered around 60 MW of the project that had not been synchronized, while 20 MW had already been commissioned.
The company had originally signed an Implementation Agreement with the state renewable energy agency, NREDCAP, in May 2013 and a PPA with SPDCL in May 2016, agreeing to supply wind power at ₹4.84 per unit for 25 years. While 20 MW was successfully synchronized and began operations by early 2019, the remaining 60 MW was delayed. Guttaseema argued that delays were partly due to regulatory and procedural bottlenecks, despite completing work on 20 MW of the pending capacity and requesting synchronization as early as May 2019.
However, SPDCL issued a notice in July 2020 unilaterally amending the PPA and terminating the agreement for the 60 MW citing Article 9 of the PPA, which requires the entire project to be completed within two years of signing. The company approached APERC but the Commission ruled in favor of SPDCL, interpreting the PPA terms to mean that each generating unit must be completed and synchronized within two years.
The Tribunal, after reviewing the appeal, disagreed with the Commission’s interpretation. It emphasized Article 1.4 of the PPA, which clearly defines the Commercial Operation Date (COD) of a non-conventional energy project as the date on which the first unit is synchronized. In this case, Guttaseema’s first unit was synchronized on March 22, 2018—well within two years from the PPA’s signing in May 2016. The Tribunal held that this synchronization should be considered the COD for the entire 80 MW project.
It also dismissed the Commission’s concern that the clause gave developers too much flexibility, allowing them to take advantage of outdated tariffs. The Tribunal clarified that project delays harm developers as well, as they have a limited time to recover costs under the 25-year agreement. The Tribunal further stated that since the agreement had been approved by the Commission itself, it was not reasonable to disregard key clauses based on later interpretation.
The Tribunal set aside the Commission’s order and quashed SPDCL’s termination notice. It directed SPDCL to immediately synchronize the 20 MW unit that has been ready since May 2019 and also permit the synchronization of the remaining 40 MW. The developer was awarded deemed generation benefits for the 20 MW capacity from the date it was ready for commissioning. The appeal was allowed in favor of Guttaseema Wind Energy Company.
