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Renewable power obligations: Regulator asks UPPCL to create Rs 7.37 billion fund
The state’s electricity regulator has directed the UP Power Corporation Ltd (UPPCL) to create a fund with a separate account and deposit the amount it is liable
The state’s electricity regulator has directed the UP Power Corporation Ltd (UPPCL) to create a fund with a separate account and deposit the amount it is liable to pay owing to its failure to buy a minimum of power from renewable sources under the renewable power obligations (RPOs).
The UP Electricity Regulatory Commission (UPERC) issued directions in this regard last week after it found the UPPCL was not meeting the mandatory RPOs.
The commission has asked the UPPCL to deposit Rs 737.11 crore (Rs 7.37 billion) and use the amount to purchase renewable power during the next two years.
“The commission directs the UPPCL to create a separate account at the earliest and deposit the amount equivalent to the respective shortfall in units of solar and non-solar purchase obligation till 2019-20,” the commission said. It has fixed the rate for each unit of unbought renewable power at Re 1.
“The total amount of Rs 737.11 crore will be deposited in the four instalments and one-fourth of the fund will be transferred in each month of December 2019, January 2020, Feb 2020 and March 2020. The amount so deposited shall be used to buy respective renewable power and compliance will be submitted to the commission from time to time,” the UPERC said.
UPERC chairman RP Singh said the regulations already mandated creation of a renewable power obligation fund.
“But no such fund has been created in the state so far,” he said.
Earlier during the suo motu hearing by UPERC, UPPCL officials admitted that RPO backlog up to 2018-19 stood at 3,721 MUs (million units) and for non-solar RPO backlog was 7,189 MUs. They said that based on the power purchase agreements tied up till date, UPPCL expected to meet the entire solar backlog RPO by the end of 2021-22 and non-solar by mid-2021-22.
“Besides, backlog hydro power obligation (HPO) of 1,319 MUs, expected to be accrued from 2019-20 to 2021-22 will also be set off by excess non-solar RPO available by 2021-22. The shortfall of account of HPO and solar will be met by the non-solar purchase,” they said.
UPPCL officials argued that UP lacked renewable resources and had signed inter-state power purchase agreements (PPAs) to be able to meet the RPOs. UPPCL, however, requested UPERC to carry forward the past obligation of non-compliance till 2022-22.
As per the regulations, a fund is to be created and maintained by such obligated entity (UPPCL) in accordance with the procedure developed by the state agency.
If the obligated agency does not fulfil its commitments towards minimum purchase from renewable energy sources during any year, the commission may direct the obligated entity to deposit into the fund such amount as the commission may determine on the basis of the shortfall in units of renewable purchase obligation.
