Uttarakhand penalizes UPCL for non-compliance of RPOs

After a prolonged wait and significant suffering of RE stakeholders, finally, a regulatory body has shown its true strength and purpose by imposing the penalty on an RPO defaulting entity – a first ever penalty imposed on any obligated entity in India. The case matter is as follow:

In December 19, 2012, UERC (Uttarakhand Electricity Regulatory Commission) had ordered state DISCOM – Uttarakhand Power Corporation Limited (UPCL), to carry forward the unmet RPO for FY 2011-12 for both solar as well non-solar sources to 2012-13 which were to be met alongwith the RPO for FY 2012-13.

• Subsequently, in September 11 – 2013, UPCL was directed to procure RECs for unmet RPO of 59.12 MUs (59,120 REC equivalent) of non-solar sources for FY 2011-12 within 2 months, i.e. by November 15, 2013 failing which UPCL would be liable for appropriate action u/s 142 of Electricity Act, 2003.
• In the same order, UPCL was also allowed to carry forward the unmet RPO of FY 2012-13 for both solar as well as non-solar sources to FY 2013-14 which was to be met with its obligation for FY 2013-14 by March 31, 2014 failure of which may attract action against it under Section 142 of the Electricity Act, 2003.

However, UPCL paid no heed to UERC’s directives and failed to comply with Commission’s order.  The Commission also acknowledged that “UPCL has been time and again making repeated non-compliance of the directions issued to it under the Act & Regulations inspite of the fact that numerous opportunities has been provided to it to mend its affairs.” Further, the Commission also commented that “ignorance of law is no excuse. UPCL being a commercial organization and a licensee under the Electricity Act, 2003 has to ensure compliances of the Act, Rules and Regulations made there under.”

UERC has considered UPCL’s non-compliance as willful contravention of the direction of the Commission and has imposed penalty of Rs.20,000/- on the Managing Director of UPCL. The Commission has also directed UPCL to comply its pending RPO by March 2014, failure to which will attract additional penalty of Rs.2000/Day thereafter.

This order brings a ray of hope for all the RE Generators in India who have desperately been waiting to see any positive step towards compliance. This order will certainly boost confidence of RE fraternity towards an almost written-off REC market.

The order can be read here