JSA represented Juniper Green Energy Private Limited and Nisagra Renewable Energy Private Limited in an Appeal before the Appellate Tribunal for Electricity challenging disallowance of change in law claims for solar projects set up in Maharashtra. The Appellate Tribunal set aside the order of the Maharashtra Commission and allowed change in law compensation for Solar Projects based on the actual DC capacity installed by developer. While recognizing the industry practice of DC overloading, the Appellate Tribunal held:
• If the RfS and PPA give the developer the right to declare CUF, it is the prerogative of the developer to finalize the optimal DC capacity for its Project in line with such declared CUF.
• If such right is perceived by the Commission in hindsight to because of undue burden on the consumer, it would be within its power and jurisdiction to introduce better controls, but for only for future, by framing regulations.
• Once the RfS and PPA have been approved by the Commission and the declared CUF has been accepted by the parties, such declared CUF cannot be questioned.
• Late Payment Surcharge Rate (“LPS”) cannot be applied for carrying cost since LPS is for limited purposes i.e. delay in payment under the PPA. This cannot be read into provision of ‘Change in Law’ which provides for full restitution of actual costs.
At a time when States are looking to re-open, renegotiate or cancel PPAs, this judgment reinforces the principle that PPA, executed and duly approved is valid and binding and that any change can only be prospective. The judicial recognition of DC Overloading and its benefits to procurers will lend certainty and clarity on the compensatory mechanism for solar project.
The matter was argued before the Appellate Tribunal by Vishrov Mukerjee.
JSA team comprised Partner – Vishrov Mukerjee, Principal Associate – Rohit Venkat, Senior Associate – Girik Bhalla, and Associate – Priyanka Vyas.