Brief Note on Rajasthan Electricity Regulatory Commission Suo-motu Order on Policy Directives issued by the State of Rajasthan with regard to Solar/Wind/Solar-Wind Hybrid Power Generation in the State

• The State Government on 22.01.2020 had issued Policy Directives to the Rajasthan Electricity Regulatory Commission (“Commission” / “RERC”) u/s 108(1) of the Electricity Act,2003 (the Act) with regard to its prospective solar/wind/wind-solar hybrid policies 2019.
• The Commission, treating the Policy Directives u/s 108 of the Act as a guidance (not mandatory) notices that certain directives of the State Government will be limited to certain generators / developers and will not cover the general consumers at large and has inter alia issued a suo-motu order in respect to the following:

• Banking:

The Policy Directive states that the Banking to be allowed at consumption end for captive Consumption and third-party sale on yearly basis @ 10 % charges in kind of banked energy. The banking year will be from April to March. However, no drawl of banked energy will be allowed at peak hours as determined by DISCOMs and the unutilized banked energy will lapse at the end of the year.

RERC observes in this regard:

• That the banking facility for renewable energy projects was introduced in its earlier regulations.
• Under the existing regulations, banking was allowed only for the captive consumer. However, according to the Policy Directive, the banking facility has been extended to the third-party sale also.
• That the burden arising from implementation of the Policy Directive cannot be passed on to the general consumers. Therefore, the Commission has directed the DISCOMs to approach the state government for claiming financial support to make good the impact in their revenue consequential to the directions. (over and above the provisions of the existing Regulations.)
• Exemption In Transmission And Wheeling Charges:

The Policy Directive provided that the transmission and wheeling charges to be levied for projects set up for captive or third-party sale within the state, after the Commencement of policies or up to March 2023, or for projects with a capacity of 500 MW (solar, wind and wind-solar hybrid, with or without storage) whichever is earlier, as follows:

• For solar power projects set up for captive use and third-party sale– 50% of Normal transmission and wheeling charges for a period of 7 years from the commissioning of the project.
• For solar power projects with a storage system and repowered wind projects set up for captive use and third-party sale –

25% of normal transmission and wheeling charges for a period of 7 years from the commissioning of the project.

• For solar power projects set up for electric vehicle charging stations for captive use and third-party sale –

100% exemption in standard transmission and wheeling charges for a period of 10 years from the date of establishment of the Electric Vehicle (EV) charging station.

(the Policy Directive also provides the above provision to be applicable for individual plant capacity of maximum 25MW)

RERC has accordingly:

• Directed the DISCOMs to claim subsidy as per Section 65 of the Act in line with the Commission’s Tariff Regulations of 2019 and initiate the provisions of exemption in transmission and wheeling charges in respect to the said State Policy Directive.
• Power Projects With Storage System:

The Policy Directive had stated that power up to 5% of RPO targets in MW (solar & non-solar combined) would be procured from solar projects with storage systems by Rajasthan DISCOMs at a tariff discovered through competitive bidding besides their RPO target.

RERC has accordingly:

• Directed the DISCOMs to implement the state government’s policy for projects with storage systems.

• Roof Top Solar System:

The Policy Directive provided that under net metering, the DISCOMs will allow solar rooftop of up to 50% of the capacity of the distribution transformer. Further, benefits such as banking facility and payment of surplus energy by DISCOMs under net-metering applicable to domestic consumers will also apply to government buildings.

The Policy directive has also provided an enabling provision for Solar Rooftop Systems, that the same can be set up under the gross Metering Scheme as per the guidelines issued by the Government and the generated power to be supplied to DISCOMs at the tariff determined by RERC.  The Capacity of 1 MW of Solar rooftop System will be allowed under this scheme.

RERC has accordingly:

• Noted that the existing RERC net metering regulations provide for a limit of 30% on the capacity of the distribution transformer for setting up a rooftop solar PV project. However, the Commission under the powers conferred under the Regulations 18 & 19 of the RERC Net- Metering Regulations, has increased the limit to 50% as stated in the Policy Directives. And the Commission emphasized that the limit of 50% should be adopted ensuring the technical feasibility and safety issues.
• Taken note of the benefit of payment of surplus energy to the state government buildings like a domestic consumer and the provision for limiting the payment for surplus energy to the domestic consumer category having been recently incorporated through an amendment in the current RERC net metering regulations, directed the DISCOMs to file a petition indicating the requirement of change in regulations for the consideration of the Commission.
• On the issue of gross metering, directed the DISCOMs to assess their needs for gross metering and then enter into a power purchase agreement (PPA).
• The Commission has also stated that the State Government also consider prescribing appropriate guidelines as contemplated in the Policy directive. If required, the Discoms may also file a petition for determination of Tariff for sale of the power generated from the solar Rooftop Systems and supplying power to the Discoms under Gross Metering scheme envisaged under the directive.

• The DISCOMs are further directed by RERC to give effect to the directives of the Government in view of directions given above. And also, the DISCOMs to conduct the impact assessment study of these government directives and furnish the report of impact assessment study to the Commission after the completion of one year. The Commission also asked the DISCOMs to submit the status of recovery of additional financial implications due to the government policy directives.