Petition No. 34/MP/2012 with I.A. Nos. 6/2012 and 9/2012 and Petition No. 36/MP/2012 with I.A. No. 8/2012. Case: 1. Mawana Sugars Limited, New Delhi, 2. Dhampur Sugar Limited, New Delhi Vs 1. Uttar Pradesh State Load Despatch Centre, Lucknow and National Load Despatch Centre, New Delhi [Alongwith Petition Nos. 45 and 46/MP/2012], 2. National Load Despatch Center, New Delhi Uttar Pradesh State Load Despatch Centre, Lucknow Uttar Pradesh New and Renewable Development Agency, Lucknow [Alongwith Petition No. 37/MP/2012]. Central Electricity Regulatory Commission

Case NumberPetition No. 34/MP/2012 with I.A. Nos. 6/2012 and 9/2012 and Petition No. 36/MP/2012 with I.A. No. 8/2012
Party Name1. Mawana Sugars Limited, New Delhi, 2. Dhampur Sugar Limited, New Delhi Vs 1. Uttar Pradesh State Load Despatch Centre, Lucknow and National Load Despatch Centre, New Delhi [Alongwith Petition Nos. 45 and 46/MP/2012], 2. National Load Despatch Center, New Delhi Uttar Pradesh State Load Despatch Centre, Lucknow Uttar Pradesh New and Renewable Development Agency, Lucknow [Alongwith Petition No. 37/MP/2012]
JudgesDr. Pramod Deo, Chairperson, Shri S. Jayaraman, Member, Shri V.S. Verma, Member and Shri M. Deena Dayalan, Member
IssueElectricity Law
Judgement DateOctober 18, 2012
CourtCentral Electricity Regulatory Commission

Order:

(New Delhi)

  1. The petitioners, Mawana Sugars Limited, Dhampur Sugar Limited, Balrampur Chini Mills Limited, Dalmia Bharat Sugar & Ind. Ltd. and DCM Shriram Consolidated Limited are bagasse based co-generation plants in the State of Uttar Pradesh and have filed these petitions being aggrieved by the conduct of Uttar Pradesh State Load Despatch Centre for not certifying the Energy Injection data of these generators for the months of November and December 2011 and January 2012 for the purpose of issuance of Renewable Energy Certificates and consequent refusal by the National Load Despatch Centre to issue these certificates. These petitions have been made with similar facts and raise similar issues. Therefore, we have referred in this order to the facts of Mawana Sugars Limited as the representative case.

  2. The Petitioner, Mawana Sugars Limited, has submitted that it is a co-generating plant having three units namely, Mawana Sugar Works, Titwani Sugar Complex and Nanglamal Sugar Complex with installed capacities of 31.5, 22.0 and 12.4 MWs respectively. These units were accredited by Uttar Pradesh New Renewable Energy Development Agency (UPNEDA), which is the State Nodal Agency, on 22.9.2011 in terms of the Uttar Pradesh Electricity Regulatory Commission (Promotion of Green Energy through the Renewable Purchase Obligations) Regulations, 2010. Subsequently, these units were registered on 13.10.2011 with the National Load Despatch Centre, which has been designated as the Central Agency under Central Electricity Regulatory Commission (Terms and Conditions for Recognition and Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010 (hereinafter referred to as "REC Regulations"). Pursuant to such accreditation and registration, the petitioner is eligible for issuance of RECs for the quantum of energy generated and injected after deducting the energy sold under preferential tariff. The Petitioner has submitted that during the months of November 2011, December 2011 and January 2012, the petitioner is eligible for RECs for the following quantum of energy:

  3. The Petitioner has submitted that in accordance with the 'Procedure for Issuance of Renewable Energy Certificate to the Eligible Entity by the Central Agency' (hereinafter "REC Procedure"), the Central Agency has an obligation to issue REC to the eligible entity after confirming the claims of the eligible entity with the energy injection report submitted by SLDC. Further, the REC Procedure provides that the eligible entity shall apply for issuance of renewable energy certificates within three months from the month in which renewable energy was generated and injected into the grid after issuance of the monthly energy injection report by the concerned SLDC. However, UP SLDC, Respondent No. 1, has failed and neglected to act in accordance with the REC Regulations and REC Procedure and has failed to verify the generation and injection data submitted by the petitioner from November 2011 onwards. The failure on the part of UPSLDC has severe adverse consequences on the petitioner as there is likelihood of the petitioner losing the RECs after a lapse of a period of three months from the respective month. The Petitioner has further submitted that since UP SLDC failed to act on the energy data submitted by other similarly placed renewable generators, proceedings were initiated by UP State Electricity Regulatory Commission and vide orders dated 26.12.2011, 10.2.2012, 16.2.2012 and 24.2.2012, the State Commission addressed the issues raised by UP SLDC and directed UP SLDC to certify the energy injection data. However the UP SLDC instead of verifying and certifying the energy injection data solicited certain information from the petitioner and other renewable energy generators. The petitioner has submitted that UP SLDC has no jurisdiction to raise the question of eligibility after the matter has been examined by the State Agency and UPERC. Under the circumstances, the petitioner was compelled to forward the energy generation and energy injection data duly verified by the concerned distribution licensee alongwith all other required information to NLDC. However, NLDC is not in a position to act on the same in view of the failure of UP SLDC to verify the energy injection data. NLDC in its e-mail dated 24.2.2012 has directed the petitioner to submit (i) print out of energy injection report signed and stamped by Authorised Signatory;(ii) copy of SLDC report; (iii) payment details; and (iv) commissioning certificate and has clarified that the energy injection report can be processed after the documents are submitted. It has been further clarified that for the month of November 2011, RECs cannot be issued if the documents are not furnished by last week of February 2012. In the meanwhile, UP SLDC in compliance with the order dated 10.2.2012 of UPERC has forwarded the report to NLDC on 23.2.2012 without checking the data.

  4. It is against the above factual context that the petitioner has filed the present petition. The Petitioner has submitted that the Commission has the jurisdiction to entertain the petition under section 79(1)(k) read with section 66 of the Act as the difficulty has arisen in this case on account of failure on the part of UPSLDC to verify the energy injection report in accordance with the REC Regulations and REC Procedure notified/approved by the Commission. The petitioner has submitted that unless the prayers are granted, apart from the petitioner losing vital commercial opportunity, there will be a direct impact on the REC market as the RECs legally generated cannot be issued and used by the obligated entities for redemption to meet their RPO obligations. The Petitioner has sought indulgence of the Commission under Regulation 15 of the REC Regulations and Para 10 of the REC Procedure to remove the difficulty arising out of the failure of UP SLDC to certify the energy injection data and to relax the timeline for submission of information to NLDC. Accordingly, the petitioner has prayed for directions to the Central Agency to issue RECs to the petitioner against the energy injection report submitted by the petitioner duly verified by the distribution company and pending issue of such directions, relax the timeline for grant of RECs to the petitioner.

  5. National Load Despatch Centre, Respondent No. 2, in its reply filed vide affidavit dated 6.3.2012 has submitted that it has taken various steps for capacity building of stake holders including SLDCs to sensitize them with respect to various issues relating to REC Mechanism. NLDC vide letter Ref: POSOCO/CERC/REC 2 dated 3.9.2010 addressed to all SLDCs, has highlighted the role of SLDCs under REC mechanism. As per para 3.1 of REC Procedure, the application for issuance of certificate shall include energy injection report duly verified by the concerned SLDC and the registration certificate. Since the Petitioner failed to submit the energy injection report duly certified by UP SLDC, Respondent No. 2 could not process the applications for issuance of RECs. Respondent No. 2 vide its letter dated 16.1.2012 requested UP SLDC to certify the injection reports of the RE Generators at the earliest and forward the same to the Central Agency in order to avoid the lapse of energy and its associated loss to concerned RE generators. It has been further submitted that the issue was discussed in the review meeting on "Implementation of REC Framework" held on 22.2.2012 and UP SLDC was advised to forward the verified energy injection report to the Central Agency for further action.

  6. UP SLDC in its reply affidavit dated 9.3.2012 has raised the following issues for consideration of the Commission:

    (a) As per the REC Regulations as amended on 29.9.2010, only Captive Power Plants (CCPs) are eligible for issuance of RECs for self consumption subject to certain prohibitions. Co-generation plants are not CPPs, and hence are not eligible for RECs on self consumptions. However, the Commission by a letter dated 21.6.2011 has clarified that a CCP/IPP/Co-generation plant would be treated as any other generator and would be eligible for entire energy generated for such plants including self-consumption for participating in the REC scheme subject to the condition that such generator meets the REC eligibility requirement applicable for a generating company. Statutory regulations cannot be amended by a letter and in view of the provisions of REC Regulations, co-generators are not eligible for entire energy generated from such plants including self-consumption for participating in the REC scheme. Moreover, the Petitioner and other co-generators in the State are availing one or other benefit in the form of concessional/promotional transmission or wheeling charges, banking facility benefits and waiver of electricity duty and even on the basis of the letter dated 21.6.2011, they are not eligible for the entire energy generated from such plants including self-consumption for participating in REC scheme. In the State of UP, the petitioner and other co-generation plants are exempted from depositing the electricity duty on self consumption vide U.P. Govt. order dated 6.2.1998 and since they are availing the benefits of waiver of electricity duty, they are not eligible for participating in REC scheme.

    (b) There is variation in the Procedure approved by CERC and the Procedure approved by UPERC for accreditation of RE energy generation projects by State Agency. UPERC approved procedure provides that the State Agency shall verify and ascertain availability of certain information including permission letter from SLDC that it possesses the necessary infrastructure required to carry out energy metering and time block wise accounting. However, no such permission letter was obtained by the UPNEDA before considering the application for accreditation of RE project and without obtaining such permission from UP SLDC...

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