The Chhattisgarh State Electricity Regulatory Commission (CSERC) resolved a dispute between the Chhattisgarh Biomass Energy Developers Association (CBEDA) and the Chhattisgarh State Power Distribution Company Limited (CSPDCL) concerning the reimbursement of electricity duties. The issue primarily revolved around the interpretation of Regulation 23 of the CSERC Renewable Energy Tariff Regulations, 2022, which deals with the pass-through of electricity duties on auxiliary power consumption for biomass plants.
CBEDA, representing biomass power plants across the state, argued that CSPDCL had been failing to reimburse the full electricity duties paid on auxiliary power consumption since February 2023. The association emphasized that, historically, all biomass plants had been allowed to pass through the entire electricity duties incurred, regardless of their commissioning date. They contended that CSPDCL’s current practice of restricting reimbursement by capping auxiliary consumption at 10% was incorrect. This 10% figure is generally used for tariff determination but should not limit the actual reimbursement of statutory duties. CBEDA requested the Commission to direct CSPDCL to follow the correct interpretation of the Regulation and allow electricity duties to be reimbursed on the basis of actual incurred costs.
CSPDCL, on the other hand, argued that the petition was primarily aimed at recovering money without paying the appropriate court fees. The distribution company maintained that Regulation 36 specified a 10% auxiliary consumption for tariff determination purposes and that Regulation 21 set ceiling norms for such parameters. Based on these provisions, CSPDCL stated that it could only reimburse duties corresponding to the 10% limit. The company also highlighted that auxiliary consumption above 10% could lead to financial losses and affect its Renewable Purchase Obligation (RPO).
After considering the arguments, the Commission, composed of Member (Law) Vivek Ganodwale and Member (Technical) Ajay Kumar Singh, ruled in favor of CBEDA. The Commission clarified that the 10% auxiliary consumption specified in Regulation 36.1 is intended solely for generic tariff determination and does not apply to statutory charges. Citing Regulation 23.1, the Commission emphasized that the determined tariff is exclusive of cess and duties, which must be reimbursed on the actual incurred basis, regardless of any ceiling. The ruling reaffirmed a similar principle established in a 2011 decision.
The Commission also dismissed CSPDCL’s concerns regarding financial losses from higher auxiliary consumption. It noted that biomass plants are required to supply power according to their Power Purchase Agreements (PPAs), and any higher self-consumption affects under-recovery for the developers rather than causing direct losses to the distribution company. Furthermore, the Commission confirmed that the dispute was about regulatory interpretation, not monetary recovery, thereby validating the petitioner’s court fee.
With this decision, biomass power generators in Chhattisgarh will now be entitled to full reimbursement of electricity duties paid on auxiliary consumption, ensuring that statutory charges are passed through accurately. The ruling provides clarity on the application of CSERC regulations and strengthens the financial stability of biomass power projects, encouraging continued investment in renewable energy in the state. This outcome is expected to reinforce the importance of clear regulatory frameworks and equitable treatment for all renewable energy developers.
