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Punjab ERC allows state discom to carry forward renewable purchase obligations

According to reports, the Punjab Electricity Regulatory Commission has allowed the state electricity distribution company, Punjab State Power Corporation Ltd, to carry forward its renewable energy purchase obligations.

The discom, an ‘obligated entity’ (which is required to buy a specified portion of power from renewable sources) could not meet its obligations for the year 2011-12 in full. In its petition to the Commission, it gave several reasons why the obligations could not be met, and prayed for reducing the quantum of mandated renewable energy purchase.

While pulling up the utility for “lack of seriousness”, the Commission recognised the point that some of the reasons for not meeting the obligations were genuine. On this basis, it allowed the unmet obligations for 2011-12 to be carried forward to 2012-13.

In its order, the Commission has said that Punjab State Power Corporation and the other governmental body, Punjab Energy Development Agency, could not “evade their respective responsibilities.”

It said that some of the reasons cited for non-compliance “could have been handled in a better manner much earlier.” The Commission further noted that the discom appeared to have “faltered the smooth running of its own RE Projects resulting in loss of valuable RE generation.”

However, the Commission also recognised the genuine difficulties faced by the discom. On the basis of this, it allowed the carry forward of the obligations.

This judgement is significant as there is a big concern in the renewable energy industry as to whether or not the respective state electricity regulatory commissions would enforce the purchase obligations strictly.

Therefore, the judgement is seen as a positive precedent by the renewable power generating companies.

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