On 3rd February 2021 Central Electricity Regulatory Commission (CERC), the apex regulatory body in India for electricity disputes, rejected a petition to declare Inter-State Transmission System (ISTS) network connecting solar parks with the National Grid as a ‘project of national importance’.
CERC also dismissed the request to exempt transmission charges and losses incurred due to delay in development and operation of solar power park projects by modifying the ‘Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010’. Clause 7 of the 2010 Sharing Regulations states that exemption for a solar (or wind) project is applicable only after commercial operation of the project.
Petitioners and Respondents in the case
Petitioners listed in the case were Andhra Pradesh Solar Power Corporation Ltd., Karnataka Solar Power Development Corporation, Gujarat Power Corporation Limited, and Solar Energy Corporation of India (SECI). Power Grid Corporation of India and Central Electricity Authority were the respondents.
Claims by Solar Power Park Developers
The petitioners in the case are solar power park developers who applied for connectivity and Long-Term Access (LTA*) in ISTS but have not achieved commercial operations even after being awarded LTA. They had claimed that the 2010 regulations do not fully address the issues regarding the projects being set up in the solar park.
According to the petitioners, projects developed in solar parks face inherent challenges of mismatch in the schedule of operationalization in LTA and achieving commercial operation.
*Long-term access refers to the right to use the inter-state transmission system (ISTS) for a period exceeding seven years.
The petitioner’s counsel further argued that solar park developers facilitate the establishment of solar projects and provide the service of the development of the solar park. So, the developers are in no position to absorb the cost of delays that may occur in the setting up of solar power projects in a solar power park. The petitioners said that such delays could be traced to different agencies, including those responsible for the selection of solar power developers through the bid process. Therefore, the charges should instead be recovered from the common pool of transmission charges.
They further suggested that transmission networks associated with solar parks may be declared by the Commission as projects of national importance and accordingly charges incurred for the development and operation of such projects may be socialized in appropriate and equitable manner as per the provisions of the 2010 Sharing Regulations with certain modifications.
CERC Decision on ISTS Charges and Solar Park Developers
Commission noted that there was no provision for differential treatment to solar park developers vis-à-vis other entities in the Connectivity Regulations. The petitioners were therefore responsible for bearing charges towards connectivity and LTA granted to them.
The Commission observed that if solar park developers choose to apply for connectivity or LTA, they must bear all consequential liabilities. Any sharing of responsibility, including payment of transmission charges and losses between the solar park developers and solar project developers, can be governed by agreements, if any, amongst them. In no case can it be shared by other entities through the common pool.
Commission also said that the 2010 Sharing Regulations did not have any provision regarding the declaration of any project as a ‘project of national importance’ and rejected the petitioners’ claim. The regulator also noted that the petitioners had not proved that the 2010 Sharing Regulations had led to delay in the bidding process or the commissioning of solar power projects so their claims do not stand.