First amendment to Chhattisgarh’s REC RPO regulations

Chhattisgarh State Electricity Regulatory Commission (CSERC) recently brought an amendment to their RPO –REC regulations . The amendment mainly highlights the issue raised by obligated entities where there is an excess purchase of renewable energy/renewable energy certificates. They have requested the commission as there is an uncertainty in consumption pattern of captive users as there has been lower consumption than the anticipated consumption. The commission has agreed to the varying nature of captive consumption. Keeping this in mind, the commission has asked that in case of excess purchase/ shortfall of renewable energy or renewable energy certificates the obligated entities can meet their RPO in the succeeding year. The last proviso of Regulation 9.1 is proposed as :
“Provided any excess purchase/ shortfall of renewable energy or the REC procured by obligated entities for meeting the RPO in the obligation period shall be considered for meeting the RPO for the succeeding year.”
The commission has also proposed that the amended regulations will be called as “Chhattisgarh State Electricity Regulatory Commission (Renewable Purchase Obligation and REC framework Implementation) (First Amendment) Regulations, 2013” and shall be in force for the period of applicability of the principal regulations (CSERC RPO-REC Regulations 2011).
REConnect also participated in providing comments to the commission on the proposed amendment. In our opinion the ‘excess purchase/shortfall’ term will allow the obligated entity to carry forward its shortfall to the next year. We have requested the commission to allow carry forward the obligation to some extent only else the obligated entities will enjoy a longer compliance period which will which will affect the REC market and the revenue of renewable energy generators in the state. The carry forward should be allowed to obligated entities only if they show genuine interest in purchasing RECs and there is non availability of RECs in the market.
The REC market itself is in a bad situation from the past few months where RE generators could sell only a few fraction of their RECs. This situation was also highlighted by the Honourable CERC in its recent suo-moto petition for extending the validity of RECs. In the petition, CERC noted:
“Needless to say, the main reason for lapsing of RECs is the reluctance and / or apathy on part of distribution licensees to come forward to buy the RECs to meet their RPO”
We feel that the proposed amendment by CSERC is will affect the RPO compliance status of captive users in the state as it will allow them to easily carry forward their shortfall of RE power/ RECs.
The order can be found here.