APERC Greenlights 7,000 MW Solar Agreement with SECI, Tackles ISTS Charge Waiver Concerns

In a significant move toward strengthen its renewable energy portfolio, the Andhra Pradesh Electricity Regulatory Commission (APERC) has approved a critical Tripartite Power Sale Agreement (PSA) that facilitates the state to draw 7,000 MW of solar power from the Solar Energy Corporation of India (SECI).

This agreement, signed on December 1, 2021, between the Andhra Pradesh Green Energy Corporation Ltd. (APGECL)—now renamed the Andhra Pradesh Rural Agriculture Power Supply Company (APRAPSCOM)—the SECI, and the Government of Andhra Pradesh (GoAP), marks a milestone in the state's push for sustainable energy.

The order, dated April 12, 2024, sets the stage for the commencement of inter-state power supply under this landmark agreement. However, the implementation of this agreement faces a potential roadblock due to concerns over the waiver of Interstate Transmission System (ISTS) charges—a crucial factor in the agreement's financial viability. These concerns arose following the introduction of new Grid Connectivity Regulations (GNA Regulations) by the Central Electricity Regulatory Commission (CERC) after the PSA was signed.

This issue was extensively discussed during the Southern Electricity Regulators Forum (SERF) meeting in Kurnool on August 2, 2024. The forum explored the applicability of the ISTS charge exemption for the SECI power drawal by Distribution Companies (DISCOMS). Subsequently, the matter was referred to a working group focused on "Renewable Energy Related Policy and Regulatory Matters," with the Hon’ble Chairman of APERC as a member.

On August 9, 2024, the working group convened in New Delhi to deliberate further on this challenge. Key CERC officials, including Dr. S.K. Chatterjee, Chief of Regulatory Affairs, and Smt. Shilpa Agarwal, Joint Chief of the Engineering Division, participated in the discussions. They indicated that by applying for GNA-RE under the GNA Regulations, APRAPSCOM could potentially secure a 100% waiver of ISTS charges, provided the agency's focus remains exclusively on renewable energy power supply.

Given the critical nature of this issue, APERC has suggested that if SECI does not take responsibility for ensuring the ISTS charges waiver, APRAPSCOM may need to apply for GNA-RE under Clause 20.4 of the GNA Regulations. This application would require obtaining a No Objection Certificate (NOC) from the State Transmission Utility (STU) to schedule the 7,000 MW of solar power from Rajasthan, thereby ensuring the intended waiver of ISTS charges for the duration of the agreement.