A solar developer who signs a power purchase agreement before the state regulator has approved it does not get to treat that earlier signing date as the one that starts the commissioning clock, the Appellate Tribunal for Electricity has held, in a ruling that cost a Karnataka developer its claim to a higher tariff while still sparing it from a complete loss on appeal.
The dispute concerned a 2 MW solar project in Tumkur, Karnataka, developed by Jayamal Energy LLP under a power purchase agreement with the Bangalore Electricity Supply Company. The developer had appealed to APTEL against directions of the Karnataka Electricity Regulatory Commission that penalised it over delay in commissioning the project and reduced the tariff it was entitled to receive, arguing that the delay was not of its own making and that the original contracted tariff of Rs. 8.40 per unit should apply regardless.
APTEL only partly agreed. On the question of delay, the tribunal upheld KERC's finding that the developer was liable for damages, rejecting the argument that the commissioning timeline should be measured from the date the parties signed the power purchase agreement. The tribunal held instead that the effective date of a PPA, for the purpose of fixing the scheduled commercial operation date, is the date on which the State Commission approves it, not the date the parties put their signatures to it. Applying that rule, APTEL fixed August 25, 2015 as the agreement's effective date, which in turn set the scheduled commercial operation date at February 25, 2017.
Having settled the delay question against the developer, the tribunal did not stop there. It remanded the separate dispute over the applicable tariff back to KERC for a fresh inquiry, to be completed within one month. The inquiry KERC must now conduct turns on a narrow but financially decisive question: had the developer crystallised its entire capital cost for the project before the scheduled commercial operation date. If KERC finds that it had, the original contracted tariff of Rs. 8.40 per unit will apply, together with carrying costs running from the date the project was actually commissioned. If KERC finds that the capital cost had not been crystallised by then, the reduced tariff that KERC had already imposed stays in place.
The result leaves the developer worse off on liability, since the delay finding against it is now final, but with a real chance of recovering the higher tariff if it can show KERC that its project costs were locked in on time even though commissioning itself ran late. That is a meaningfully different position from either outright affirming KERC's reduced tariff or restoring the developer's claimed rate outright, and it reflects how APTEL has increasingly been treating delay and tariff as separate questions in solar disputes, rather than letting a finding on one automatically decide the other.
The effective-date ruling carries weight beyond this one project. Solar and wind developers frequently sign power purchase agreements well before the relevant state commission gets around to approving them, sometimes by many months, and disputes over scheduled commercial operation dates recur across state regulatory practice precisely because developers and distribution licensees count the clock differently. By fixing the regulator's approval date, not the signing date, as the trigger for the commissioning timeline, APTEL has given state commissions a clearer anchor to apply the next time a developer argues that its project was not really late once the right starting point is used.
For solar developers currently in dispute with distribution licensees over commissioning delays elsewhere in the country, the case is a reminder to keep separate, contemporaneous records of when project capital costs were actually locked in, independent of when the physical commissioning was completed. On APTEL's reasoning here, that distinction, not simply the fact of delay, is what will decide whether a developer ends up stuck with a reduced tariff or recovers the rate it originally negotiated.