APTEL directs NLDC to issue RECs from COD

Appellate Tribunal of Electricity (APTEL) in its order dated 28.11.2014, has directed NLDC to issue Renewable Energy Certificates (RECs) from the date of commercial operation (COD).

As per the recent CERC amendment dated 10.07.2013 to REC Regulation, which specifies that the renewable generating plant would be eligible for issuance of RECs from COD or from the date of registration whichever is later. The said amendment is as follows:

“10 (1) After registration, the renewable energy generation plant shall be eligible for issuance of Certificates under these Regulations from the date of commercial operation or from the date of registration of such plant by the Central Agency whichever is later.”

However, the main regulation also quotes:

“7 (1) The eligible entities shall apply to the Central Agency for Certificates within three months after corresponding generation from eligible renewable energy projects.”

The language used is ‘eligible entities’ and not ‘registered entities’. Irrespective of the date of registration, an eligible entity is entitled to apply for RECs within three months from the date of commissioning and generation of electricity as Regulation 7 (1) has not been made subject to Regulation 5 (1) of the REC Regulations which describes only the eligibility and registration for certificates.

A perusal of the above regulation does not show that there is limit to RECs being issued against generation only after the date of registration since the registration process is merely procedural with a view to verify and confirm that the substantive conditions under the REC Regulations have been fulfilled. But, fulfillment is not from the date of registration, but from when the generation of electricity commences.

The APTEL has held that the regulations has to be interpreted and applied in the light of the object to promote the renewable generators and not in a restrictive manner to deprive the generators of any benefit that may be available to them.

As a result, the APTEL has said that Appellants would be entitled to the REC for the electricity generated from COD and the same ought not to be postponed to the generation after completion of the procedural formalities of registration.

The order may only have a small positive impact in number of RECs issued, and issuance of RECs will not be affected by delays in registration process by SNAs.

The order can be accessed here.

Contributed by Venkataramana Mutharasu