Andhra Pradesh discom asked to pay Rs 70.5 cr to Vayu Urja Bharat

01 Sep 2021 CW Team

Vayu Urja Bharat filed a petition asking the state electricity regulator to issue orders to the discom to comply with its order dated 3st August 2019, for payment of Rs 164 million as power supply costs.

The petitioner is a generating firm that holds and runs a 120 MW wind power project in the Anantapuram district. It also inked a 25-year power purchase agreement (PPA) with Southern Power Distribution Company of Andhra Pradesh (APSPDCL) to sell the produced power from the project.

As per the Commission’s order in 2018, the tariff was fixed at Rs 4.84 per kWh without accelerated depreciation (ACD). The petitioner launched the project in three phases in 2017.

The petitioner said that it was increasing monthly bills. But, APSPDCL was making just part payments after deducting GBI and high tension (HT) services.

The firm sought a direction for a Rs 95.77 million payment against a partially paid monthly invoice from March 2017 to May 2018. It also requested the Commission to order APSPDCL to pay Rs 1.13 billion towards outstanding monthly bills from June 2018 to 6th March 2019, Rs 64.70 million towards late payment surcharges within a week from the date of order, and 15% per annum carrying cost.

Additionally, the petitioner contended that APSPDCL should pay Rs 705.4 million towards GBI and CUF elements. APSPDCL was liable to pay for all the units produced according to the tariff agreed under the PPA and should not restrict payment by putting a ceiling on the CUF.

Earlier, the State Commission had pondered CUF of 23.5% to reach the tariff payable, that if the energy generated is above the CUF, discoms are liable to buy it. But considering such surplus power purchase as an added advantage to the generator and an unfair burden, discoms have paid the bills by putting a ceiling on CUF at 23.5%.

Concerning GBI, the power generator said that GBI was only enabled for 70 MW capacity out of 120 MW as just 70 MW was commissioned by end of 2017.

Replying to the petition, APSPDCL said that it would pay the monthly bills to Vayu Urja Bharat over time as and when funds were available. However, DISCOMs could not pay bills on time due to their grim economic condition, it said.

APSPDCL said that Vayu Urja Bharat also gave the option to end the PPA in case of default. But, it did not choose to terminate the PPA, and thus APSPDCL must not be burdened with the payment of interest for delayed payments.

The discom notified the Commission that it depended on the High Court order, which ordered it to pay Rs 2.43 per kWh for the pending and future bills as an interim measure. Hence, there was no non-compliance with any orders of the Commission.

APSPDCL also presented the entire balance payable according to the Commission’s order in 2019 was cleared with the payment of Rs 556.4 million. Additionally, the Commission had announced a CUF of 23.5% to reach the tariff payable per unit. Hence, discoms had to set the upper limit at 23.5% on CUF.

It also said that Vayu Urja Bharat had been obtaining a subsidy from the Government of India in the form of GBI at Rs 0.50 per unit with an upper limit of Rs 10 million. Additionally, in its order dated July 28, 2018, the Commission ordered power generators to pass the GBI advantages to discoms. Hence, discoms continued to decrease GBI costs from the bills of the generators who got subsidies.

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Also read: Bengal govt wants balance between solar and thermal power

The Andhra Pradesh Electricity Regulatory Commission (APERC) has given six weeks to an Andhra Pradesh distribution company (discom) for the payment of a withheld amount of Rs 705.4 million to a wind energy-producing firm towards capacity utilisation factor (CUF) and generation-based incentive (GBI) components. Vayu Urja Bharat filed a petition asking the state electricity regulator to issue orders to the discom to comply with its order dated 3st August 2019, for payment of Rs 164 million as power supply costs. The petitioner is a generating firm that holds and runs a 120 MW wind power project in the Anantapuram district. It also inked a 25-year power purchase agreement (PPA) with Southern Power Distribution Company of Andhra Pradesh (APSPDCL) to sell the produced power from the project. As per the Commission’s order in 2018, the tariff was fixed at Rs 4.84 per kWh without accelerated depreciation (ACD). The petitioner launched the project in three phases in 2017. The petitioner said that it was increasing monthly bills. But, APSPDCL was making just part payments after deducting GBI and high tension (HT) services. The firm sought a direction for a Rs 95.77 million payment against a partially paid monthly invoice from March 2017 to May 2018. It also requested the Commission to order APSPDCL to pay Rs 1.13 billion towards outstanding monthly bills from June 2018 to 6th March 2019, Rs 64.70 million towards late payment surcharges within a week from the date of order, and 15% per annum carrying cost. Additionally, the petitioner contended that APSPDCL should pay Rs 705.4 million towards GBI and CUF elements. APSPDCL was liable to pay for all the units produced according to the tariff agreed under the PPA and should not restrict payment by putting a ceiling on the CUF. Earlier, the State Commission had pondered CUF of 23.5% to reach the tariff payable, that if the energy generated is above the CUF, discoms are liable to buy it. But considering such surplus power purchase as an added advantage to the generator and an unfair burden, discoms have paid the bills by putting a ceiling on CUF at 23.5%. Concerning GBI, the power generator said that GBI was only enabled for 70 MW capacity out of 120 MW as just 70 MW was commissioned by end of 2017. Replying to the petition, APSPDCL said that it would pay the monthly bills to Vayu Urja Bharat over time as and when funds were available. However, DISCOMs could not pay bills on time due to their grim economic condition, it said. APSPDCL said that Vayu Urja Bharat also gave the option to end the PPA in case of default. But, it did not choose to terminate the PPA, and thus APSPDCL must not be burdened with the payment of interest for delayed payments. The discom notified the Commission that it depended on the High Court order, which ordered it to pay Rs 2.43 per kWh for the pending and future bills as an interim measure. Hence, there was no non-compliance with any orders of the Commission. APSPDCL also presented the entire balance payable according to the Commission’s order in 2019 was cleared with the payment of Rs 556.4 million. Additionally, the Commission had announced a CUF of 23.5% to reach the tariff payable per unit. Hence, discoms had to set the upper limit at 23.5% on CUF. It also said that Vayu Urja Bharat had been obtaining a subsidy from the Government of India in the form of GBI at Rs 0.50 per unit with an upper limit of Rs 10 million. Additionally, in its order dated July 28, 2018, the Commission ordered power generators to pass the GBI advantages to discoms. Hence, discoms continued to decrease GBI costs from the bills of the generators who got subsidies. Image Source Also read: Bengal govt wants balance between solar and thermal power