TNERC proposes amendment to quorum requirements; Prospects for signing Solar PPAs brighten

One of the reasons often cited for the delay in signing of the PPAs under the Tamil Nadu Solar policy is that Tamil Nadu Electricity Regulatory Commision (TNERC) has not approved the tariff proposed by Tangedco. And one of the reasons TNERC has not approved the tariff is because it does not have a Chairman and has only one member as against the requirement of 3 members including the Chairman. Given this situation, TNERC had not taken any major regulatory decision, since a quorum of 2 members is required for decision making. This has left several initiatives including the Solar programme in limbo.
According to the Economic Times article(read here), the Appellate Tribunal for Electricity(Aptel) had expressed its displeasure over the delays in appointments and has raised the concern that such regulatory uncertainties could lead to the defeat of objectives of the Electricity Act of 2003. The Tribunal has advised the Ministry of Power to take suitable steps to prevent the creation of such institutional vacuum and directed the state regulatory commissions( especially Andhra Pradesh, Jharkhand and Tamil Nadu) to amend regulations related to the quorum. The Aptel also made the following important points
“1. It is to be pointed out that this Tribunal has already rendered judgments while interpreting Section 93 of the Electricity Act, 2003 that any decision taken by the Commission should not be invalidated by a mere fact that there is some vacancy either of the Chairman or Member.
2. In view of the above decision, we are to direct all the Commissions to conduct the proceedings irrespective of the quorum since the proceedings before the Commission could be conducted even by a single Member. 
3. Therefore, we direct that all the Commissions concerned irrespective of the Regulations with regard to the quorum for a meeting, that Commission, even with a single Member despite that there are vacancies of other Members or Chairperson, can continue to hold the proceedings and pass the orders in accordance with the law” .
In view of the above judgement, the TNERC has proposed and amendment to add the following provision
“ Provided that the quorum of the Commission shall be one Member, where there is only one Member due to vacancies in the post of Members”. 
The draft amendment can be downloaded here, and TNERC has invited comments from stakeholders by 12th January 2014.
Even if the amendment gets delayed, TNERC will still be able to take decisions now because a second member, S.Rajagopal, has been appointed to the commision(details available here). These two developments have raised the expectations of the industry which has been battered by the uncertainty caused by the delay in signing of PPAs by close to a year.
A few industry insiders we spoke to were very optimistic that the PPAs under the Tamil Nadu policy will be signed around the auspicious Pongal festivals(mid-January 2014). However, given the fact that there have been several false signals of signing of PPAs in the past, this optimism might be misplaced. Nonetheless, a heavy dose of optimism is what is keeping the industry going in a sector that has virtually come to a stand-still.
Subscribe to RESolve Energy Consultants : Perspectives and Insights by Email