Petition No. 142/2011. Case: In Re: Determination of Forbearance and Floor Price for the REC Vs. Central Electricity Regulatory Commission
| Case Number | Petition No. 142/2011 |
| Judges | Pramod Deo, Chairperson, M. Deena Dayalan, V.S. Verma, S. Jayaraman, Members |
| Issue | Electricity Law |
| Judgement Date | August 23, 2011 |
| Court | Central Electricity Regulatory Commission |
Order:
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BACKGROUND
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In exercise of the power under Section 66 and 178 of the Electricity Act, 2003, the Commission has notified the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010 (hereafter REC Regulations).
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As per the first proviso to Clause (1) of Regulation 9 of the REC Regulations, the Commission may in consultation with the Central Agency (Power System Operation Corporation Limited) and Forum of Regulators from time to time provide for floor price and forbearance price separately for Solar and Non-solar Renewable Energy Certificates.
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Further, Clause (2) of Regulation 9 of the REC Regulations provides for the guiding principles for determining the forbearance and floor price for solar and non-solar Certificates. The relevant provisions are extracted as under:
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Pricing of Certificate:
(1) The price of Certificate shall be as discovered in the Power Exchange:
Provided that the Commission may, in consultation with the Central Agency and Forum of Regulators from time to time provide for the floor price and forbearance price separately for solar and non-solar Certificates.
(2) The Commission while determining the floor price and forbearance price shall be guided inter alia by the following principles:
(a) Variation in cost of generation of different renewable energy technologies falling under solar and non-solar category, across States in the country;
(b) Variation in the Pooled Cost of Purchase across States in the country;
(c) Expected electricity generation from renewable energy sources including:
i. expected renewable energy capacity under preferential tariff
ii. expected renewable energy capacity under mechanism of certificates;
(d) Renewable Purchase obligation targets set by State Commissions
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The Commission earlier came out with an Order dated 1st June, 2010 for 'Determination of Forbearance and Floor Price for the REC framework' (Suo Motu Petition No. 99/2010) and provided forbearance price and floor price for dealing in Certificates under the REC Regulations:
Non solar REC (`/ MWh)
Solar REC (`/ MWh)
Forbearance Price
3,900
17,000
Floor Price
1,500
12,000
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Above determined forbearance price and floor price are valid for the control period up to FY 2012. For determination of forbearance and floor Price for the REC framework for the next control period i.e. from 1st April 2012 onwards, the Commission vide its Suo Motu Order (No. 142 / 2011) dated 13th June, 2011 proposed the following forbearance and floor price and invited comments and suggestions on the same:
Non solar REC (`/ MWh)
Solar REC (`/ MWh)
Forbearance Price
3480
13690
Floor Price
1400
9880
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As required under proviso to Regulation 9 (1) of REC Regulations, the Commission has also consulted the Forum of Regulators (FOR) and the Central Agency vide letter number 1/3/2009 Reg. Affairs (RE Tariff-FY-1010-11)(ii)/CERC dated 14th June, 2011.
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39 stakeholders have submitted their comments / suggestions in response to the Suo Motu Order (No. 142 / 2011) dated 13th June, 2011 proposing forbearance & floor prices for REC to be applicable from 1st April 2012. List of such stakeholders is attached as Annexure-1.
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A public hearing was held on 19th July, 2011. Ten participants presented their comments / suggestions during public hearing. List of such participants is attached as Annexure-2.
Consideration of the views of the stakeholders & analysis and findings of the Commission on important issues
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The Commission considered the comments of the stakeholders, views of the participants in the public hearing on the proposed floor and forbearance prices. Analysis of the important issues and findings of the Commission thereon are discussed in the subsequent paragraphs. Other comments of the stakeholders and observations thereon are enclosed as Appendix-A.
Comments/Suggestions received and Commission's decision thereon
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Average Power Purchase Cost (APPC)
(a) Some State Electricity Regulatory Commissions (SERCs) suggested that the Average Power Purchase Cost (APPC) used for calculating the forbearance and floor prices for REC should be updated as per the...
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