CERC Rejects PGCIL Plea to Condone Delay in Transmission Project

The Central Electricity Regulatory Commission (CERC) has decided not to condone the delay beyond the revised Scheduled Commercial Operation Date (SCOD) of October 31, 2017, for the Vindhyachal-Jabalpur 400 kV 2nd double circuit transmission line project associated with the 750 MW Rewa Ultra Mega Solar Park in Madhya Pradesh.

However, the Commission has allowed the capitalization of Interest During Construction (IDC) and Incidental Expenditure During Construction (IEDC) for the period between March 15, 2017 (originally the scheduled commercial operation date- SCOD) and October 31, 2017 (the revised SCOD).

The petitioner has been granted the opportunity to claim revisions in IDC and IEDC capitalization during the true-up process for the 2014-19 tariff period, which is yet to be filed.

This decision follows a directive from the Appellate Tribunal for Electricity (APTEL) to re-examine the matter.

Background

Power Grid Corporation of India (PGCIL) had filed a petition seeking approval for the transmission tariff for the LILO of Vindhyachal-Jabalpur 400 kV 2nd double circuit line, along with associated bays at the 400/220 kV Rewa pooling station.

The project was part of the transmission system for the solar park in Rewa District, Madhya Pradesh.

On November 5, 2018, the CERC refused to approve the time overrun of 478 days from the scheduled commercial operation date of the project.

PGCIL went in an appeal to APTEL, which, on March 14, 2023, directed CERC to reconsider the matter based on additional documents submitted by PGCIL.

Commission’s Analysis

The Commission noted that the transmission system’s SCOD was on March 15, 2017, but it commenced operations on July 6, 2018, resulting in a 478-day delay.

PGCIL provided evidence that the asset was ready by January 31, 2018, per the Central Electricity Authority (CEA)’s Energization Certificate.

The petitioner stated that the transmission system would be implemented in phases matching the solar park’s progress, per regulatory approval. Rewa Ultra Mega Solar (RUMSL) had informed PGCIL that the SCOD was extended to October 31, 2017.

Upon re-examination, CERC condoned the time overrun from March 15, 2017, to October 31, 2017, acknowledging that this delay was due to the need to match the commissioning of the transmission asset with the delayed commissioning of the associated solar power project by RUMSL.

However, the Commission refused to approve the delay from October 31, 2017, to July 6, 2018.

The Commission found that while PGCIL’s asset was ready by January 31, 2018, as per the CEA, it declared commercial operation only on July 6, 2018.

The asset completed successful trial operations on March 27 and 29, 2018. Despite this, PGCIL claimed the COD as July 6, 2018, to match with generation commencement.

The Commission, therefore, allowed only the capitalization of IDC and IEDC for the condoned period up to October 31, 2017.

The petitioner has been granted the opportunity to claim revisions in IDC and IEDC capitalization during the true-up process for the 2014-19 tariff period, which is yet to be filed.

The Commission found that the delay from October 31, 2017, to the actual COD was not due to force majeure or change in law events. Therefore, this period of delay was deemed within PGCIL’s control and not eligible for condonation.

Earlier this year, CERC had directed the elimination of manual entries of bids and cancellation/modification of bids outside of trading hours, citing multiple violations.

Previously, it had ordered all power exchanges to redesign their bidding software to allow members to quote prices within a specified range for different types of contracts.

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