Ministry of New and Renewable Energy enlarges the scope of Approved List of Models and Manufacturers (ALMM)
- On January 13, 2022, Ministry of New and Renewable Energy (MNRE), Government of India vide its Office Memorandum amended Paragraph 3 of the Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019 to include the Renewable Energy Projects which apply for Open Access/Net Metering Projects within the ambit of the ALMM. The office memorandum also clarifies that 'Projects under Government Schemes & Programmes' include projects set up under Component 'A' of PM-KUSUM Scheme.
- Only the eligible models and manufacturers of solar PV cells and modules complying with the BIS Standards and included in the ALMM are eligible for use in Government Projects/Government assisted Projects/Projects under Government Schemes & Programmes/Open-Access/Net-Metering Projects, installed in the country, including Projects set up for sale of electricity to Government under the guidelines issued by Central Government under Section 63 of Electricity Act, 2003 and amendment thereof. Prior to this amendment, the ALMM did not cover Open Access/Net Metering Projects.
MNRE- Simplification of Guidelines for the implementation of PM-KUSUM
- On December 14, 2021, Ministry of New and Renewable Energy (MNRE), Government of India simplified the Guidelines for implementation of Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan Scheme that were released on July 22, 2019 (Office Memorandum).
- Vide the Office Memorandum, the States have been given an option to procure the standalone solar agriculture pumps (support for installation of which is provided to farmers under Component-B of the scheme) by following their respective process of inviting bids from the vendors for their empanelment and this has been done to supplement the centralised tendering process in states where the centralised process has not been able to yield sufficient vendors leading to a failure to complete the sanctioned capacities within the allocated time. However, the price discovered in the latest centralized tender shall be the ceiling price for the bids in the State tender thereby curtailing the liberty of the States on the matter of price.
- Moreover, owing to demands for extension of timelines prescribed for completion of sanctioned capacities by States, the implementation period of all the three components of PM-KUSUM has been increased to 24 months from the date of issue of sanction.
- With respect to feeder level solarization, in order to encourage conservation of groundwater and electricity, the 2019 guidelines incentivizes farmers who consume less electricity than the benchmark consumption, by paying them per unit for the consumption less than the benchmark. However, in order to avail this mandatory benefit/incentive, it was necessary that the farmer installed a meter. Resultantly, the States were considering that some farmers may be unwilling to install meters to avail this benefit thereby hindering the effective implementation of the scheme. Therefore, the Government has decided to make the incentive optional. The farmers will no longer be under a compulsion to install meters. The DISCOM will inform the farmer of the benefit but leave it to his discretion whether to opt or not for the same.
Ministry of Power constitutes Conciliation Committee of Independent Experts (CCIE) for resolution of contractual disputes in projects implemented by CPSUs/Statutory Bodies under the administrative control of Ministry of Power
- On December 30, 2021, Ministry of Power (MOP), Government of India with a view to effectively, timely and amicably resolve contractual disputes between the Developer and the Contractors of power sector projects and so as to ensure that such projects are completed in a time-bound manner and no unnecessary capital or human resource is wasted towards resolution of unwarranted legal issues, decided to constitute Conciliation Committee of Independent Experts (CCIE).
- The Office Memorandum of the MOP states that there shall be three CCIEs, each CCIE remaining valid for a period of three years (subject to extension of validity for a maximum period of 5 years). Further, each CCIE shall have three members who shall be appointed amongst the following three categories: (i) Former Officer of the rank of Secretary/Add. Secretary to the Government of India; (ii) Sector Experts having substantial domain knowledge of project development and O&M of power projects; and (iii) Experts in finance with experience in senior positions of financial institutions, provided that one member in each CCIE belongs to the (ii) category. The working of CCIE shall be entrusted to the Central Electricity Authority.
- The conciliation proceedings envisaged under Part III of the Arbitration and Conciliation Act, 1996 are to be completed in each case through five sittings within a period of three months from the date of reference. However, in exceptional circumstances and for reasons to be recorded in writing, the period can be extended for a further period of three months.
- The OM also makes clear that the conciliation proceedings are not to be treated like arbitration proceedings with strict legal formalities but must be undertaken with a sense of 'mutual give and take' in the spirit of settlement. It also provides an ad-hoc, Standard Operating Procedure which lays down the manner of working of the Conciliation Committee.
- Upon conclusion of conciliation proceedings, if the parties agree on a settlement agreement, such agreement shall be entered into in writing and must be signed by both the parties and authenticated by at least two conciliators so as to bind the parties in terms of Section 73 of the Arbitration and Conciliation Act, 1996. Thereafter, all necessary actions for implementation of such settlement agreement must be taken within a period of 30 days unless an extended period is agreed to in the settlement agreement provided such extended period shall not exceed 60 days. However, if the conciliation proceedings fail, the parties may take recourse to Courts but shall be simultaneously precluded to avail the option of arbitration.
Ministry of Power seeks comments on Draft Electricity (Late Payment Surcharge and Related Matters) Rules, 2021
- On December 25, 2021, Ministry of Power (MOP), Government of India issued the Draft Electricity (Late Payment Surcharge and Related Matters) Rules, 2021 (Draft Rules) seeking comments on them till January 10, 2022 (now extended till January 24, 2022). The Draft Rules, when notified, intend to repeal and replace the Electricity (Late Payment Surcharge) Rules, 2021 in effect and notified on February 22, 2021.
- Late Payment Surcharge
- The Late Payment Surcharge (LPS) shall be payable on the payment outstanding after the due date at the base rate of Late Payment Surcharge applicable for the period for the first month of default.
- The rate of LPS for the successive months of default shall increase by 0.5% for every month of delay provided that the LPS shall not exceed the 3% higher than the base rate at any time. Further, LPS shall not be higher than the rate of LPS specified in the Agreement, if any.
- Adjustment towards Late Payment Surcharge
- The Draft Rules also provide a priority to the LPS in case wherein any payment for procurement of power made by a DISCOM to a generating company or a trading licensee or by user of a transmission system to a transmission licensee will first be adjusted towards the LPS and only thereafter towards monthly charges.
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