The KERC has passed an order on December 17, 2019 in respect of how energy injected into the grid prior to the execution of a wheeling and banking is to be treated.
Hindustan Aeronautics Limited which is the petitioner in the matter, is the owner of two wind projects with a capacity of 4.2 MW and 2.1 MW in the state of Karnataka. The petitioner had made an application for open access for the two wind projects to the State Load Despatch Centre. The wheeling and banking agreement(s) for the two projects were executed on 2 June, 2016. Between the date of commissioning of the wind projects and the date of execution of the wheeling and banking agreements, the petitioner had injected 49,17,902 units of electricity into the grid. While the petitioner contended that the injected power should be treated as banked energy, the respondents refused to pay for such power and treated it as infirm power.
The KERC ordered that the power injected into the grid from the date of grant of open access to the date prior to the execution of the wheeling and banking agreement is required to be treated as banked energy and such banked energy is required to be credited to the account of the petitioner as opening balance of banked energy as on 1 January, 2020. The decision of the KERC was based on the following:
- There was no inordinate delay by the DISCOM in granting the open access, hence, the petitioner is not entitled to be compensated for the power injected from the date of commissioning of the wind projects up to the date of grant of open access.
- The petitioner is not entitled to any compensation for the energy injected into the grid on the basis of Section 70 of the Indian Contract Act, 1872 since, the APTEL has held recently in its orders that the no compensation may be granted to a generator for any power injected into the grid prior to the execution of a commercial agreement.
- However, regulation 9 of the KERC (Terms & Conditions for Open Access) Regulations, 2004 clearly states that for any power injected into the grid from the date of grant of open access till the date of submission of the wheeling and banking agreement, a generator will be entitled to payment of energy charges at the rate of the average pooled power purchase cost.
Thus, in view of the above, the KERC instead of requiring the respondents to make payment of energy charges to the petitioner, directed them to treat the energy injected into the grid as banked energy.
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