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Joint Electricity Regulatory Commission order for RPO Compliance

According to reports, immediately after the land mark order given by the honorable Maharashtra Electricity Regulatory Commission on the enforcement and strict compliance of the Renewable Purchase Obligations (RPO) including the Distribution Licensees including  the entire backlog upto FY 2012-13 and for the current financial year FY 2013-14, the honorable Joint Electricity Commission for the state of Goa and UTs (Union Territories) which regulates the Electricity Departments of Goa, Andaman & Nicobar, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Pudducherry has also reviewed their previous order in this regard and has given strict instructions to obligated entities to comply with their RPOs by 31st March 2014 and to submit their compliance report by 20.12.2013.

The commission has also stated that if the licensees / OEs fail in the compliance the commission shall be constrained to proceed under Regulation 4 of the JERC (Procurement of Renewable Energy) Regulations, 2010 against the licensees/ OEs. In case of default the Obligated Entity has to deposit into a separate fund, to be created and maintained by State Agency, such amount as the Commission may determine on the basis of the shortfall in units of RPO and the forbearance price. Moreover the Obligated entity is also liable for penalty as may be provided by the Commission under Section 142 of Electricity Act, 2003.
This order is seen as a major initiative towards compliance of RPO and will boost the confidence of the RE investors especially in Solar and the bankers and financers in the REC mechanism.
The main point to be noted here is that CED (Chandigarh Electricity Department) is perhaps the only Electricity Distribution Company which has as per the provisions of the regulations has purchased Solar RECs towards an attempt to comply with their shortfall in Solar RPO.
Based on this order if the distribution companies come forward to comply with their deficit Solar RPO by the mean of purchase of Solar RECs this will lead to a demand of around 2.5 Lakh Solar RECs. This will clear almost 50% of the REC inventory from both the power exchanges.
The Joint Secretary Ministry of New & Renewable Energy Mr. Tarun Kapoor has personally shown major interest in the compliance of the Solar RPO and promotion of Solar Energy in the country and has also urged regulatory commission to suitably revisit their regulations in respect of the solar RPO from the period of 2013-14 to 2021-22 and suitable revise the same upwards and also take appropriate steps to ensure that the obligated entities comply with the stipulated target set in the regulations notified by the commission for solar RPO.
On this occasion Mr. Vikalp Mundra, Joint Managing Director, Ujaas energy Limited has expressed his happiness and said that the initiatives like consensus by the Forum of Regulators on the need of stricter action against non-compliance of RPO targets, need of invoking
provisions in the regulation in the form of imposing non-compliance charges in case of default and then these orders will help in boosting the investments in this sector.
Ujaas Energy Limited formerly known as M and B Switchgears Limited which is the first company to have a solar power plant under REC mechanism and is pioneer in the field of Solar REC has installed more than 60 MW of solar power plants under REC mechanism for themselves and for their various clients in India and is in process to install 100 MW more by March 2014.
Mr. Mundra further says that compliance of RPO should not be done only because of the regulations and should not be treated as a burden on the Obligated Entity or on the consumers. The biggest challenge faced today by the humanity is the global warming and the impact of the climate change and we need to mobilize our national energies and resources in meeting climate change. OEs must recognize the adverse impact of the climate change and the need to address this issue a major step needs to be taken in letter and spirit by the means of compliance of the RPO. All these initiatives are taken in larger public interest. Based on the same other regulators should also come forward with similar orders and should ensure the compliance of the RPOs by the Obligated Entities.

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