TSERC Rejects Additional Charges For Renewable Energy Compliance In Telangana

Posted On - 5 August, 2024 • By - King Stubb & Kasiva

Summary

The Telangana Electricity Regulatory Commission (TSERC) rejected a proposal by the Telangana State Load Despatch Centre (TSLDC) to impose charges on entities obligated to purchase renewable energy.[1] The TSLDC had proposed these charges under the Renewable Power Purchase Obligation (RPPO) Regulation, 2022, citing the need to cover the costs of its functions under the regulation. However, the TSERC found the proposed charges to be excessive and unnecessary, as the stakeholders were already paying fees under a different regulation. The Commission also noted that the RPPO regulation did not mandate the imposition of such charges.

Case Timeline

  • 04.04.2022: TSERC notified the RPPO Regulation, 2022.
  • 23.06.2023: TSLDC submitted a proposal to TSERC seeking approval for remuneration and charges under the RPPO regulation.
  • 19.09.2023: TSERC invited objections/suggestions/comments from stakeholders on the TSLDC’s proposal.
  • 09.10.2023 and 10.10.2023: TSDISCOMs requested exemption from the proposed charges.
  • 25.11.2023: TSERC directed TSLDC to respond to the objections.
  • 03.07.2024: TSERC issued an order rejecting the TSLDC’s proposal.

Issue Raised

The primary issue was whether the TSLDC’s proposed charges for entities obligated to purchase renewable energy under the RPPO regulation were justified and necessary.

Appellant’s Arguments and Respondent’s Arguments

  • TSLDC’s Arguments: The TSLDC argued that the charges were necessary to cover the costs of its functions under the RPPO regulation, and that the proposed rates were in line with charges collected for REC accreditation.
  • TSDISCOMs’ Arguments: The distribution licensees requested an exemption from the charges, citing the interest of consumers.
  • Penna Cement Industries Limited’s Arguments: The company argued that the charges were an additional financial burden and that the TSLDC’s proposal was unfair and unreasonable.

Order

The TSERC rejected the TSLDC’s proposal, finding the proposed charges to be excessive and unnecessary. The Commission noted that the stakeholders were already paying fees under a different regulation and that the RPPO regulation did not mandate the imposition of such charges.

Analysis

The TSERC’s decision reflects a balanced approach to regulating the renewable energy sector. By rejecting the TSLDC’s proposal, the Commission protected consumers from unnecessary financial burdens while ensuring that the TSLDC’s functions under the RPPO regulation could still be carried out through existing funding mechanisms. The decision also highlights the importance of carefully considering the financial impact of regulatory decisions on all stakeholders.

[1]http://tserc.gov.in/file_upload/uploads/Orders/Commission%20Orders/2024/Order%20in%20OP%20No%205%20of%202024%20SLDC.pdf