Standard Post with Image

Delays in the tariff adoption by SERC causing investors to shy away

As per Electricity Act 2003 and in compliance of competitive guidelines, SERCs are expected to adopt tariffs that have been discovered through a transparent bidding process. Some of these regulators are taking more than a year for formally adopting tariffs. DISCOMs also seem to be delaying the procedure in some states. There have also been cases of state regulators rejecting tariffs after the bidding process, and then recommending the retender of these projects. This has become a serious issue for solar power developers. MNRE has tried to address the issue of tariff adoption, by providing relief to the developers by stating that in case the distribution licensee approaches the appropriate commission for the adoption of tariff and the commission does not decide on the tariff within 60 days of submission, the tariffs will be deemed to have been adopted by the appropriate commission. But have mislaid timeline for filing the petition by the DISCOM and also its do not lay linkages between financial closure timelines and commissioning dates with the adoption of the tariff. Due to delay in non-adoption of tariffs, lending institutions are reluctant to provide debt financing to the developers, where they are facing challenges when raising capital for projects. Issues related to the acquisition of land and transmission infrastructure have also dissuade developers from participating in tenders in certain states. If such issues knock together iy may cause investors to shy away from investing in their states, as investor cannot risk of unforeseen delays in the project development timelines.