CERC warns transmission utilities against creating false expectations with developers

The Central Electricity Regulatory Commission (CERC) has granted partial relief to Waaree Forever Energies Private Limited in relation to its 700 MW solar power project in Maharashtra, while criticising the Central Transmission Utility of India Limited (CTUIL) for delays in processing connectivity approvals and creating what it described as “false expectation” for the developer.

Project and connectivity application

Waaree Forever Energies is developing a 700 MW solar power project at Salgar in Solapur district, Maharashtra. The company applied for grid connectivity in September 2024.

According to the order, the company had initially sought connectivity for 1,000 MW but was informed that only 700 MW transmission capacity was available. CTUIL subsequently granted in-principle connectivity approval in December 2024, with March 31, 2026 fixed as the connectivity start date.

The dispute arose after the final connectivity approval was issued significantly later than the timeline prescribed under the regulations. Waaree argued that the delay left it with insufficient time to achieve financial closure and meet project development milestones.

Developer’s submissions

Waaree sought extension of the connectivity start date to September 2027 and extension of the financial closure deadline to March 2027.

The company submitted that delays in obtaining final connectivity approval and challenges in securing power purchase agreements were beyond its control. It stated that nearly Rs 96 crore had already been invested in the project and commitments amounting to Rs 4,132 crore had been made.

CTUIL’s position

CTUIL argued that it had no authority under the applicable regulations to extend the connectivity start date. It also contended that the project developer was aware of the applicable timelines from the outset and that granting extensions would create an undesirable precedent.

The transmission utility further maintained that financial closure requirements were statutory in nature and could not be relaxed.

Commission’s observations

CERC noted that the regulations required CTUIL to issue final connectivity approval within 15 days of receiving the required bank guarantees. While the bank guarantees were submitted on January 2, 2025, the final approval was issued only on August 28, 2025.

The Commission observed that CTUIL continued discussions with the developer regarding possible extensions instead of issuing the final approval within the prescribed timeline. According to the order, this created an “untrue expectation” that the connectivity start date could be deferred.

CERC expressed displeasure with CTUIL’s conduct and stated that a statutory body must process applications objectively and in accordance with the regulations. The Commission directed CTUIL to follow the regulatory framework “in letter and spirit” and not use correspondence seeking regulatory amendments as a basis for delaying approvals.

Relief granted

While rejecting the request to extend the connectivity start date, CERC granted limited relief on financial closure requirements.

The Commission allowed Waaree 30 days from the date of the order to submit financial closure documents for the first 300 MW phase of the project.

It further stated that if the documents are submitted within 30 to 60 days, a penalty equivalent to 5% of the bank guarantee amount would apply. Failure to submit the documents within 90 days would result in revocation of connectivity.

Connectivity date not extended

CERC held that the applicable regulations do not permit extension of connectivity start dates once they have been determined. While acknowledging the impact of delays in the approval process, the Commission concluded that it lacked the regulatory basis to grant the extension sought by the developer.

The order nevertheless underscores that transmission utilities are expected to adhere strictly to prescribed timelines and that regulatory intervention may be warranted where delays adversely affect project developers.

The featured photograph is for representation only.