Karnataka Electricity Regulatory Commission orders immediate renewal of PPAs in mini-hydro and wind projects
Taking serious note of the delay in renewing Power Purchase Agreements (PPA) for mini-hydro and wind projects and non-payment for the energy fed into the
Taking serious note of the delay in renewing Power Purchase Agreements (PPA) for mini-hydro and wind projects and non-payment for the energy fed into the grid, the Karnataka Electricity Regulatory Commission (KERC) has issued a suo motu order for the renewal of PPAs within three months. It has instructed the generators to submit applications for renewal of PPAs within 90 days before the expiry of their original PPAs. In its order, the commission noted that delays in renewing PPAs has led to generators supplying electricity without valid agreements, resulting in non-payment for energy fed into the grid.
In order to address this, KERC has now introduced a system of deemed approval for renewal agreements. The tariff for the extended period will be fixed at 85% of the 20th year tariff or a negotiated rate, whichever is lower. The order further mandates that Escoms (Electric Supply Companies) must decide before expiry whether they wish to continue the agreement. If power is required, Escoms must negotiate and execute renewal PPAs for an additional 10 years.
If not, they must inform the generator in advance. The KERC stated that once renewal PPAs are executed, they will be automatically deemed approved by KERC. In cases where Escoms fail to act despite timely applications, the PPAs will be considered extended under the commission’s earlier order of March 2024. KERC clarified that while deemed approval ensures continuity, any disputes or errors in renewed agreements will still be subject to final adjudication by the commission.
Escoms are also required to submit copies of renewed PPAs to KERC along with applicable fees. It is expected to bring greater certainty to renewable energy producers and distribution companies, ensuring uninterrupted supply and payment in Karnataka’s power sector.
The BriefWire