Mahoba Solar Granted Compensation Approval for Safeguard Duty Impact by CERC
The initial petition was met with partial approval, with the Commission granting compensation for safeguard duty but rejecting claims for carrying costs.
November 22, 2023. By News Bureau
The petition, grounded in the Power Purchase Agreement (PPA) signed with Solar Energy Corporation of India Limited (SECI) and BSES Yamuna Power Limited (BYPL), reached a significant development with a favourable decision from the Electricity Commission.
The initial petition was met with partial approval, with the Commission granting compensation for safeguard duty but rejecting claims for carrying costs. Undeterred, MSUPL appealed the decision to the Appellate Tribunal for Electricity (APTEL), presenting a case supported by precedents where compensation was granted for additional expenses and carrying costs arising from changes in law events.
In its recent order, the Electricity Commission recognized MSUPL's entitlement to compensation for the impact of safeguard duty, both preceding and following the Commercial Operation Date (COD) of the project.
The approved compensation encompasses additional expenses and carrying costs, extending up to the date of reimbursement by the Respondents.
Additionally, MSUPL is eligible for carrying costs from the date of actual payments to the authorities until the issuance of the order, at the actual interest rate paid by MSUPL for fund arrangements or the applicable late payment surcharge rate as per the PPA, whichever is lower.
Notably, the imposition of a late payment surcharge is contingent upon the Respondents' failure to make payments within the specified due date following the raising of a supplementary bill by MSUPL.
The Commission issued clear directives for the reconciliation of additional expenditures and carrying costs, requiring correlation with projects and substantiation through auditor certificates. It emphasized that BSES Yamuna Power Limited (BYPL), the distribution utility, is liable to remit to SECI the reconciled claims that SECI owes to MSUPL. Importantly, SECI's payment to MSUPL is not dependent upon BYPL's payment to SECI.
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