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Home News Power Sector News HC stays Karnataka ERC’s retro charges on green power companies

HC stays Karnataka ERC’s retro charges on green power companies

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kercThe Karnataka High Court has issued an interim stay on the state electricity regulatory commission’s May 14 order that imposed transmission and wheeling charges retrospectively on renewable energy developers.

The order was passed on Thursday by a vacation bench of the court in response to writ petitions filed by wind developer Avaada and two Bengaluru-based developers—the Prestige Group and the Embassy Group. Although the next date of hearing has not been fixed, the court has asked Karnataka Electricity Regulatory Commission (KERC) to respond in writing to the developers’ submissions.

Other renewable energy developers are likely to follow suit, according to a developer who was present during the court proceedings.

Solar energy producers were so far exempted from paying transmission and wheeling charges, while other renewable energy developers paid 5% of the cost of their tariff.

KERC’s order directed that all renewable energy producers should pay 25% of the same charges imposed on conventional power producers—solar developers from April 2017, wind developers from October 2013, and small hydro developers from January 2015.

It argued that the concession on transmission and wheeling charges had been given at a time when renewable energy developers were not in a position to compete with conventional power developers. However, with the fall in solar and wind tariffs and the growth in the country’s renewable capacity, the situation had changed. In any case, only 25% of the full charge was being sought, the KERC said.

Renewable energy producers, however, noted that the retrospective clause would completely upset their financials, since they had won projects quoting tariffs which presumed transmission and wheeling charges would remain the same. They said such sudden, arbitrary decisions would affect investment in the sector.

 

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