KERC Orders Timely Renewal of PPAs for Mini-Hydro and Wind Projects in Karnataka

The Karnataka Electricity Regulatory Commission (KERC) has issued a suo motu order directing the immediate renewal of Power Purchase Agreements (PPAs) for mini-hydro and wind projects. The order aims to address delays that have led to generators supplying electricity without valid agreements, resulting in non-payment for energy fed into the grid.

Under the new directive, generators must submit applications for renewal of PPAs within 90 days before the expiry of their original agreements. KERC has introduced a system of deemed approval for renewal agreements to ensure continuity. The tariff for the extended period will be set at 85% of the 20th year tariff or a negotiated rate, whichever is lower.

The order mandates that Electric Supply Companies (Escoms) must decide before the expiry of a PPA whether they wish to continue the agreement. If power is required, Escoms must negotiate and execute renewal PPAs for an additional 10 years. If not, they must inform the generator in advance.

KERC stated that once renewal PPAs are executed, they will be automatically deemed approved by the commission. In cases where Escoms fail to act despite timely applications, the PPAs will be considered extended under the commission’s earlier order of March 2024. However, KERC clarified that while deemed approval ensures continuity, any disputes or errors in renewed agreements will still be subject to final adjudication by the commission.

Escoms are also required to submit copies of renewed PPAs to KERC along with applicable fees. The order is expected to bring greater certainty to renewable energy producers and distribution companies, ensuring uninterrupted supply and payment in Karnataka’s power sector.