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Spinning mills’ body files case against Tamil Nadu solar policy

According to reports, the Tamilnadu Spinning Mills’ Association (TASMA) has filed a petition with the Appellate Tribunal for Electricity essentially asking the Tribunal to declare Tamil Nadu Government-imposed ‘solar purchase obligation’ null and void.

This is the first formal expression of the rumblings that the imposition of the SPO has created in the State. The Tamil Nadu Government, in its recent policy for encouraging solar power, said certain specified categories of consumers would need to mandatorily purchase or self-generate solar power. The quantum was specified as 3 per cent of their total consumption this year and 6 per cent from next year onwards. This effectively meant that these consumers — mainly, industrial consumers — would need to shell out more for their power.

Normally, such a measure would need to be first got approved by the respective state electricity regulatory commission. However, the Tamil Nadu Government issued this order invoking Section 108 of the Electricity Act, 2003, which empowers a State Government to issue directions to the State electricity regulator. As such, the State regulator, TNERC, formally approved the Government’s policy in March.

Now, TASMA has raised a few legal points. It says that in the first place Section 108 does not empower the State Government to issue any direction to the Commission as it pleases. It says the law permits the Government to issue directions only for public interest, and that too, only in relation to the functioning of the Commission.

Secondly, it says that while there is a national ‘renewable purchase obligation’ in vogue which has a solar power purchase component — duly approved by TNERC also — there is no scope for the State Government or the regulator to further impose an additional ‘solar purchase obligation’.

“The State Commission lacks authority to make an order or regulation notifying a sector specifically,” the appeal says. TASMA notes that already its members own wind power capacity. “Hence, making them again obligatory for solar power exclusively is no way sustainable by law,” it says.

Third, it says that exempting the State Government’s own distribution utility from the SPO is discriminatory and arbitrary.

It is expected that at least 226 MW of solar power projects will be given ‘letters of intent’ shortly, leading to the creation of a significant solar power capacity in the State.

The petition assumes significance because the ‘solar purchase obligation’ is the cornerstone of the Tamil Nadu Government’s solar policy, and is generally seen as a model for other States to emulate. The SPO essentially creates the demand for solar power. If the SPO is decided to be not valid in law, it will have serious ramifications for the development of solar power in the State.

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