M/s Renew Solar Energy (TN) Pvt. Ltd. vs Madhya Pradesh Electricity Regulatory Commission & Anr

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
Court-2
APPEAL No. 53 of 2020
rd
Dated : 3 July, 2026
Present: Hon’ble Ms. Seema Gupta, Officiating Chairperson
Hon’ble Mr. Virender Bhat, Judicial Member

In the matter of:


M/s Renew Solar Energy (TN) Pvt. Ltd.
138, Ansal chambers II,
Bikaji Cama Place, Delhi - 110066 … Appellant

Versus

1. Madhya Pradesh Electricity Regulatory Commission
Through its Secretary
th
5 Floor, Metro Plaza, Area Colony
Bittan Market, Bhopal - 462016

2. Madhya Pradesh Power Management Company Limited
Through its Managing Director
Shakti Bhawan, Rampur,
Jablapur – 482008 … Respondent (s)


Counsel for the Appellant(s) : Parinay Deep Shah
Ritika Singhal
Surabhi Pandey
for App. 1


Counsel for the Respondent(s) : C.K. Rai
for Res. 3

Nitin Gaur
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Appeal No. 53 of 2020 Page 1 of 16

for Res. 2


J U D G M E N T
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. The Appellant, an independent power producer of clean energy
th
in the State of Madhya Pradesh, is disallowed by the order dated 6
st
December, 2018 passed by 1 Respondent – Madhya Pradesh
Electricity Regulatory Commission (hereinafter referred to as “the
Commission”) in Appellant’s petition No. 09 of 2018 whereby the
Commission rejected the request of the Appellant to be billed for
import of power during non-solar hours on net-off basis as per Article
7.01 of the PPA instead of as per temporary HT industrial category
as envisaged under Regulation 10 of MPERC (Co-generation and
generation of Electricity from Renewable sources of Energy)
(Revision-I) Regulations 2010 (hereinafter referred to as “2010 Co-
generation Regulations”).
2. It appears in response to Request for Proposal (RFP) dated
th nd
28 November, 2013 issued by the 2 Respondent – Madhya
Pradesh Power Management Company Ltd. inviting bids for
procurement of power from solar energy sources under “Case-1 RE”
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Appeal No. 53 of 2020 Page 2 of 16

bidding procedure through tariff based competitive bidding process,
the Appellant successfully bid and accordingly entered into a Power
th nd
Purchase Agreement (PPA) dated 5 June, 2014 with the 2
Respondent for supply of 50 MW of power at the rate of Rs.6.97 per
kWh from its solar power plant located in Village Hulpur, Ladpura &
District Sheopur, Madhya Pradesh. The Appellant successfully
th
commissioned the power plant in three phases i.e. on 7 May, 2015,
th th
6 June, 2015 and 27 November, 2015 and has been supplying
nd
power to 2 Respondent since the date of commissioning.
3. The Appellant has been raising invoices for the power supply
nd
by it to the 2 Respondent as per Article 7.01 of the PPA by arriving
at the bill amount by subtracting the imported units to exported units.
nd
The 2 Respondent does not appear to have raised any objection to
such bills. It also did not raise any separate invoices to the Appellant
for the energy imported by it for start up of the solar plants till the
March, 2016.
nd
4. According to the Appellant, the 2 Respondent unilaterally
changed the billing pattern which was communicated to the
th
Distribution Licensees vide letter dated 29 January, 2016, the
contents of which are extracted hereinbelow:-
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"However, due to some technical reasons an exception
was mentioned at point no. 6 of the circulated guidelines,
allowing treatment and billing of power drawn as per
prevailing practice and payment on the basis of net
energy supplied (i.e., energy exported to grid less energy
imported from the grid) as per provisions of the respective
PPAs by those generating plants from renewable energy
sources, whose tariffs were determined by competitive
biddings (i.e., select solar power projects).
Now after reconsidering the matter and for the purpose of
removal of difficulties, it has been decided that the
procedural guidelines circulated vide this office letter
under reference will be applicable for all generating plants
from renewable energy sources including the plants for
which tariffs have been determined through competitive
biddings. Accordingly, the exception at point no. 6 of the
guidelines mentioned in the above referred letter be
treated as withdrawn."

nd
5. Subsequently, vide letter dated 30th May, 2016, the 2
Respondent instructed the Central Discom namely Madhya Pradesh
Khestra Vidyut Vitran Company Limited to ask the Appellant to revise
its bill for the month of April, 2016 for supply of electricity based upon
nd
the gross generation energy injected into the grid. The 2
Respondent also directed the Central Discom to ask the Appellant to
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Appeal No. 53 of 2020 Page 4 of 16

th
raise all such future bills in terms of the letter dated 29 January, 2016
nd
issued by 2 Respondent to the Discoms. Consequently, the Central
Discom began to raise bills to the Appellant for the power imported
from the grid for the solar plant. While justifying the change in the
nd
billing pattern, 2 Respondent relied upon Regulation 10 of 2010
MPERC, Co-generation Regulations.
6. It is in these circumstances that the Appellant had approached
the Commission with petition No. 09 of 2018 with the following
prayers :-
“(a) Direct MPPMCL to allow the petitioner to raise bills
in terms of Section 7.01 of the PPA which provides for
billing on the basis of net-off of the import-export of
auxiliary consumption power;
(b) Direct MPPMCL to stop separately charging the
petitioner for the power being imported for auxiliary
consumption;
(c) Set aside and quash the bills which have already
been raised by MPPMCL on the petitioner with the
direction to net-off and past imported power against the
export power in the future bills.”

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Appeal No. 53 of 2020 Page 5 of 16

7. The petition has been disposed off by the Commission vide
th
order dated 6 December, 2018 thereby rejecting the prayers of the
Appellant, which order has been impugned in this appeal.
8. We have heard Mr. Parinay Deep Shah, Learned Counsel for
the Appellant, Mr. C.K. Rai, Learned Counsel for 1st Respondent and
Mr. Nitin Guar, Learned Counsel for Respondent No. 2. We have also
perused the written submissions filed by the Learned Counsels.
9. The core issue which arises for our consideration in this appeal
is:-
“Whether the term “shut down period” appearing in clause
10 of 2010 MPERC Co-generation Regulations includes
the night time period when the Appellant’s solar power
plant does not generate power due to absence of sunlight”.
10. While referring to the Regulation 10 of MPERC Co-generation
rd
Regulations 2010 and previous judgement of this Tribunal dated 23
April, 2015 in Appeal No. 297 of 2013 titled GMR Gujarat Solar
Power Pvt. Ltd. Vs. GERC & Ors., the reasoning given by the
Commission for rejecting the prayers of the Appellant is as under :-
“14. The Commission also noted that the export of power
from solar power plant being the infirm power cannot be
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Appeal No. 53 of 2020 Page 6 of 16

equated to the firm import temporary power drawn by the
petitioner from time to time. The tariffs for export and
import of power are different at the point of connection.
The import of power is required by the plant at the time
when the generation is not available for in house
requirement of power and, therefore, power available at
the point of connection is used by the plant as a temporary
measure till the generation is available for in house
requirement and export to the grid. Also, the tariff
determined by the Commission from time to time for solar
energy based power generation is the maximum tariff for
the purpose of export of power to the licensee only by the
developer/generator and is subject to the bidding. Also,
the tariff for import of power by the developer/generator is
governed through retail supply tariff order. As such, the
question of considering the difference of tariff between
import and export of power under “change of law” does
not arise. Therefore, the commission is of the view that
the petitioner may be billed as per the extant provisions of
the MPERC (Cogeneration and Generation of Electricity
from Renewable Sources of Energy) Regulations, 2010
as amended.”

11. We are unable to concur with such reasoning of the
Commission.
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Appeal No. 53 of 2020 Page 7 of 16

12. Article 7.1 of the PPA relates to billing and power accounting
and is extracted herein below”-
“SECTION 7.01: BILLING AND POWER ACCOUNTING
Every month, SLDC/RLDC shall intimate to the concerned
Transco/Discom (in whose area the drawl point is
situated), the net power (kWh) delivery point (Export Unit
– Import Units = Net Power kWh) for the purpose of billing
for sale by the Seller to the grid.”

13. Perusal of this provision in the PPA clearly reveals that the bills
with regard to the sale of power by the power producer i.e. the
Appellant shall be raised in respect of the net power (kWh) delivered
at the delivery point i.e. export units - import units.
14. Regulation 10 of 2010 MPERC, Co-generation, Regulations
provides as under :-
“The Generator/Co-generation from Renewable Sources
would be entitled to draw power exclusively for its own use
from the Distribution Licensee’s network during shutdown
period of its Plant or during other emergencies. The
energy consumed would be billed at the rate applicable to
Temporary Connection under HT Industrial Category.”

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15. Manifestly, this Regulation provides methodology for billing the
energy consumed by a power generator, which is involved in
generation of power from renewable sources, during shut down
period of the power plant or during other emergencies.
16. The Commission has proceeded on the assumption that the
Appellant’s solar power plant has to be taken to have “shut-down”
during night time when it is unable to generate power due to the
absence of sunlight and, therefore, the power consumed by the
power plant during the said period for its own use from the grid has
to be billed separately at the rate applicable to Temporary HT
Industrial Category.
17. It is a common feature that a solar power plant generates
electricity only when the sunlight is available. They would be unable
to generate electricity in case of unavailability of the sunlight even
though the generating station remains operational throughout. During
these hours when the solar power plant is unable to generate
electricity due to lack of sunlight, the plant draws power from the
system of the Distribution Licensees for its auxiliary consumption.
However, the fact remains that the solar power plant does not remain
“shut down” during the non-solar hours when it is unable to produce
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electricity in the absence of sunlight. The power plant remains
operational throughout and ready to generate power as and when
solar radiation becomes available.
18. The term “shut down” used in Regulation 10 in reference to a
power plant means when the whole power plant is turned off and is
unable to generate power not because of unavailability of the
resources (which is the sunlight in case of solar power plant) but
because the machinery of the plant had been turned off and the plant
is inactive. In other words, “shut down” indicates that the power plant
has ceased to operate and is unable to generate power.
19. That is not the case with the solar power plants during non-solar
hours when they are unable to produce electricity not because of
machinery having been switched off and having ceased to operate
but because of the absence of sunlight even though the plant has
been operational throughout.
20. The arguments advanced on behalf of the Respondents that
“shut down” encompasses periods when the plant is idle or non-
functional from the stand point of generation though it may remain
strictly ready, is devoid of any merit. When a power plant is strictly
ready for power generation but is unable to generate power due to
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lack of resources, it cannot be said that the plant is under shut down.
Such an interpretation would be in consonance to the doctrine of
purposive interpretation and would advance the object as well as
purpose of setting up of solar power plants.
21. The expression “or during such emergencies” appearing after
the term “shut down” in Regulation 10 is to be read as belonging to
the same clause as the events of shut down, as envisaged under the
principle of ejusdem generis. In other words, such situation would not
encompass the period where the power plant is operational as well
as ready for power generation but is unable to generate due to lack
of resources i.e. sunlight in case of solar power plant.
22. Commission’s reliance on the judgement of this Tribunal dated
rd
23 April, 2015 in Appeal No. 297 of 2013 titled GMR Gujarat Solar
Power Pvt. Ltd. Vs. GERC & Ors. is totally misplaced. The relevant
extract of the said judgement of this Tribunal is given below :-
23. We have also been informed by the Appellant that the
PPA entered into with the Distribution Licensees is as per
the model PPA which was approved by the State
Commission in the year 2009. This is not disputed by the
Respondents. The PPA had a provision for charging
energy supplied by the distribution companies to Solar PV
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Appeal No. 53 of 2020 Page 11 of 16

project at temporary HTP supply rate. Therefore, the
State Commission was not correct to declare that Clause
regarding 'Delivered Energy' as provided for in the PPA
as illegal. The PPA was based on the solar power tariff
order dated 29.01.2010 of the State Commission and the
model PPA approved by the State Commission.
Therefore, the State Commission was wrong in declaring
the Clause relating to 'Delivered Energy' as illegal and
void ab initio.
…
25. The impugned order has been passed contrary to the
generic tariff order dated 29.01.2010 for solar projects.
The PPA entered into between the Appellant and GUVNL
was based on model PPA and the tariff order dated
29.01.2010. The State Commission has illegally interfered
with the PPA which was in order and was in consonance
with the solar tariff order dated 29.01.2010. The Solar PV
plant has to be charged at temporary HTP category tariff
for import of standby power supply as determined by the
State Commission in retail supply tariff order from time to
time in consonance with the solar tariff order dated
29.01.2010 and the amount has to be adjusted in the bill
for supply of solar power by Solar PV Power Plant to
GUVNL.”

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23. Therefore, in that case, the PPA executed between the power
generated and the Discom clearly provided that the energy supply
by Discom to solar power project shall be charged at temporary tariff.
Accordingly, this Tribunal directed that the billing of import power
must happen as per the relevant clause of the PPA. To the contrary,
nd
in the instant case, the Commission instead of directing the 2
Respondent to bill the import of power by the Appellant’s power
nd
project as per the relevant clause of the PPA, has directed the 2
Respondent to issue bills for the import of power by Appellant’s
power project in terms of the Regulation 10 of MPERC Co-
generation Regulations, 2010 which is clearly inapplicable to the
facts of the case.
24. Much emphasis was laid by Learned Counsel for the
th
Respondents on another judgement of this Tribunal dated 12
February, 2020 in Appeal No. 112 of 2017 titled M/s Malwa Solar
Power Generation Pvt. Ltd. Vs. MPERC and ors., to submit that under
Regulation 10 of MPERC Co-generation Regulations import of power
by a solar plant is to be billed at temporary HT Industrial category. We
have gone through the said judgement and find the facts involved
therein are clearly distinguishable from the facts of the instant case.
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The prominent distinguishing feature, which goes to the root of the
matter is that in Malwa case, generator was not supplying power to
any Discom within the State of Madhya Pradesh and the entire power
generated by the power plant was sold to Discoms outside the State
through SECI under back to back power sale agreements. It was in
this factual matrix that this Tribunal held that netting off could not be
permitted since the generator was not selling power to Madhya
Pradesh Discoms.
25. Para 40 of the judgement is material on this aspect and is
extracted hereinbelow:-
“40. Apparently, the Appellant is not selling power to any
of the Discoms within the State of MP. Entire power
generated by the Appellant Solar Plants is sold to different
Discoms outside MP through SECI as stated above i.e.,
back to back PSA by SECI with different distribution
companies. Therefore, the question of netting off power
imported by the Appellant, whatever name it is called
auxiliary or otherwise cannot be netted off against the
power it would generate and supply to various Discoms
through SECI. If the power generated by the Appellant
from its solar plant was sold to MP Discom, then whatever
regulation would apply to such import and export of power
would also apply to the Appellant.”
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Appeal No. 53 of 2020 Page 14 of 16

26. That is not the situation in the instant case. Here, the Appellant
is supplying power to the Madhya Pradesh Discom itself under the
PPA dated 05/06/2014.
27. Further, notably this Tribunal has not proceeded to interpret the
term “shut down” appearing in Regulation 10 of 2010 MPERC Co-
generation Regulations, and, therefore, has not held that a solar
power plant is deemed to be “shut down” during night hours when it
is unable to produce power due to lack of solar radiation.
28. We find that Article 7.01 of the PPA expressly provides for
billing on the basis of netting off power i.e. export units - import units
which mechanism has been agreed upon between the parties. In fact,
the Appellant had been raising bills as per the mechanism provided
under Article 7.01 of the PPA since date of commissioning of the
nd
power plant which were never objected to by the 2 Respondent till
the month of May, 2016 when there was a sudden change of mind on
nd
the part of the 2 Respondent, which clearly is not in consonance
with the provisions of the PPA and thus cannot be countenanced.
29. In view of the above discussion, we answer the issue framed
by us in paragraph No. 9 herein above in negative. We make it clear
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that a solar power plant cannot be taken to be in “shut down” mode
during night hours when it is unable to produce power due to absence
of solar radiation and therefore, import of power by the plant during
that period from the system of distribution licensee is not regulated by
Regulation 10 of 2010 MPERC Co-generation Regulations. Such
power has to be billed on net-off basis as per Article 7.01 of the PPA.
30. Hence, the impugned order of the Commission cannot be
sustained and is hereby set aside. We direct that the Appellant shall
th
continue raising bills in terms of Article 7.01 of the PPA dated 5 June,
2014 executed between the parties on the basis of net-off power i.e.
nd
export units - import units and restrain the 2 Respondent – MPPCL
from charging the Appellant separately for the power imported by it
for auxiliary consumption during non-solar hours.
31. The Appeal stand allowed accordingly in these terms.
rd
Pronounced in the open court on this 3 day of July, 2026.


(Virender Bhat) (Seema Gupta)
Judicial Member Officiating Chairperson

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REPORTABLE / NON REPORTABLE
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