MERC Grants Relief For Bird Diverter Costs In GIB Habitat Under Change In Law Provision In Maharashtra
The Maharashtra Electricity Regulatory Commission (MERC) has issued an order in Case No. 191 of 2024, granting financial relief to Adani Hybrid Energy Jaisalmer Four Limited (AHEJ4L) for additional costs incurred due to a "Change in Law" event. The case relates to expenses for installing bird flight diverters on transmission lines to protect the endangered Great Indian Bustard.
AHEJ4L operates a 700 MW wind-solar hybrid project in Jaisalmer, Rajasthan, which lies within the natural habitat of the Great Indian Bustard. In 2021, the Supreme Court of India directed that all overhead transmission lines in such areas must be fitted with bird diverters to reduce bird collisions. Following this mandate, AHEJ4L installed the required equipment and later sought compensation under the "Change in Law" provisions of its Power Purchase Agreement with Adani Electricity Mumbai Limited (AEML-D).
The dispute mainly focused on identifying who should bear the cost of installing diverters across different parts of the transmission network. Some sections were directly under the generator's scope, while others were developed by Adani Renewable Energy Park Rajasthan Limited, which acted as the Solar Power Park Developer. AHEJ4L stated that it had paid for the installation even on lines developed by the park developer through mutual arrangements, in order to avoid delays. However, AEML-D raised concerns over the timing of these agreements and asked for proof that the diverters met the required technical standards.
After reviewing the case, the Commission confirmed that the Supreme Court's order qualifies as a valid "Change in Law" event. It was observed that although technical standards for bird diverters were available earlier, the legal requirement to install them came into force after the project's cut-off date. Based on this, MERC directed AEML-D to pay ₹26.53 crore to AHEJ4L as compensation for the expenses incurred on installing diverters on dedicated transmission lines.
The Commission also examined the issue of carrying costs, which refers to the interest on funds spent by the generator before reimbursement. AHEJ4L had requested that this be calculated using a compounding rate based on Late Payment Surcharge rules. However, MERC ruled that carrying costs would be allowed only on a simple interest basis, linked to the interest rate on working capital loans under its 2019 renewable energy tariff regulations.
The order also noted that the issue of carrying costs is subject to the final decision of the Appellate Tribunal for Electricity. Additionally, the release of the compensation amount will depend on AHEJ4L demonstrating that the installed bird diverters meet all prescribed technical standards.
Key Insights
- This topic is currently trending
- Experts are closely monitoring developments
- It may impact future decisions
