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Appellate Tribunal for Electricity (Aptel) has directed the Gujarat Electricity Regulatory Commission (GERC) to invite suggestions and objections of the public and stakeholders while reviewing Renewable Purchase Obligation (RPOs) of the distribution licensee companies for relaxation, carry forward or penalty.
The direction was issued by the Aptel while hearing an appeal filed by the Indian Wind Energy Association (IWEA) challenging order of GERC revising RPO targets for FY 2010-11 and allowing carry forward of shortfall in procurement of renewable energy during FY 2011-12 to FY 2012-13 by distribution licensee companies. The IWEA had also sought penalty for the distribution licensee companies for non-fulfillment of RPO targets.
According to case details, GERC issued the GERC (Procurement of Energy from Renewable Sources) Regulations, 2010 specifying the RPO of the distribution licensees and other obligated entities in Gujarat. The Regulations specified the RPO separately for wind, biomass/ baggase and others and solar energy.
In April 2012 GERC initiated suo motu proceedings to assess compliance of the RPO Regulations. After hearing in August 2012 the Commission revised the RPO targets of distribution licensee for FY 2010-11 from the levels prescribed in the RPO Regulations and further ordered to carry forward the shortfall in procurement of renewable energy during FY 2011-12 to FY 2012-13. Also, any excess procurement of solar energy by the distribution licensee companies during FY 2012-13 was also allowed to be adjusted against the fulfillment of non-solar RPO for that financial year.
IWEA appealed against this order of GERC claiming that that wind energy producers and other stakeholders were not heard while grating relief to distribution licensee companies on RPO front. After hearing the IWEA, GERC and other distribution licensee companies the Aptel partially accepted IWEA’s challenge, but ruled that there was infirmity on part of the GERC in revising the RPO targets for the distribution licensee companies.
“We feel that adequate notice was not available to the distribution licensee to tie up supplies with renewable energy developers to meet the substantial increase in the RPO specified for FY 2010-11. There is a gestation period for development of renewable energy projects. The alternative mechanism of REC (Renewable Energy Certificates) was introduced only in October 2010 and therefore, the REC availability was also limited. Hence, we feel that the State Commission has correctly allowed the relaxation in view of the circumstances of the case which were beyond the control of the distribution licensees,” the Aptel order stated, adding “we do not find any infirmity in the order of the State Commission regarding revision of RPO targets during FY 2010-11.”
The applet tribunal since the present case is the first suo motu review of compliance of the RPO obligations after the notification of the RPO Regulations and in view of the fact that there was no specific regulation for public notice for such reviews in the RPO Regulations, we do not propose to hold that the absence of public notice in the suo motu proceeding was illegal. However, we would like to give directions for future for such proceedings.
The Aptel bench of M Karpaga Vinayagam and Rakesh Nath observed that since this was the firs case where GERC had taken suo motu step to review compliance of the RPO obligations they did not "propose to hold that the absence of public notice in the suo motu proceeding was illegal." However, they issued directions for future such proceedings.
In future "such review should be subjected to public notice to invite suggestions and objections of all the stakeholders. Thus, in separate proceeding for annual review of RPO or otherwise by the State Commission either suo motu or on application from a party, the suggestions and objections of the public should be invited" Aptel directed GERC.
