TN spinning mills group gearing up for fight in apex court

Chennai : An association of spinning mills in Tamil Nadu is gearing up for a battle in the Supreme Court against the state power distribution utility’s appeal against the Appellate Tribunal for Electricity order on solar power purchase obligation, said sources.

“The Tamil Nadu Spinning Mills Association (TASMA) is in the process of preparing its submission to the apex court. The next hearing of the case is Oct 17,” an industry source told IANS preferring anonymity.

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In January, the tribunal, on an appeal by TASMA, set aside the Tamil Nadu Electricity Regulatory Commission’s (TNERC) order obligating all high tension consumers to procure solar power to the tune of three percent of their total power up to Dec 31, 2013 and six percent from Jan 1, 2014 onwards.

The TNERC’s order is in pursuance of the state government’s 2012 Solar Energy Policy aiming to make the state a regional hub for solar power.

TASMA members account for around 3,500 MW of wind power installed in the state.

According to the source, TASMA would present a strong case in favour of its members who are already producing renewable power and obligating them to buy costlier power from another renewable source is not justifiable.

In a circular to its members, TASMA said it would file its counter soon to restore the status quo and the right of its members.

As per TASMA’s calculations, its members – spinning mill companies – would have to bear Re.1 extra per unit of power consumed if they are subjected to the solar power purchase obligations.

The tribunal set aside the TNERC’s orders saying that the state government could not impose six percent purchase obligation as there is already another obligation in effect – the renewable purchase obligation (RPO), under which certain companies have to purchase 8.75 percent of their power needs from renewable sources and an additional 0.25 percent from solar power producers.

The tribunal also held exempting the Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) from the solar power obligation is discriminatory.

“Tamil Nadu generates over 100 MW solar power and ranks sixth in the nation. If the apex court order is in favour of the state government, then the installed capacity will see an accelerated growth,” said Vineeth Vijayaraghavan, chair of the Institution of Engineering and Technology (IET) think tank India Solar Panel.

According to industry sources, those who have invested in land anticipating the solar power projects are the ones who have to wait for some more time.

“If the apex court order goes against the state government then the government may come out with a new framework for solar power purchase,” an industry official told IANS.

Meanwhile, the TNERC has issued a consultative paper for raising the solar component of the RPO to two percent from the current 0.25 percent so that a capacity of 1,000 MW of solar power could be added in the state.