Legal Battle Unfolds: Power Purchase Agreement Dispute Over Solar Energy Refund – SolarQuarter

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In a recent legal dispute between Juniper Green Three Private Limited (referred to as “the Petitioner”) and Gujarat Urja Vikas Nigam Limited (referred to as “the Respondent” or “GUVNL”), the former sought a refund of ₹31,23,372/- that was unilaterally and allegedly illegally deducted by GUVNL. The matter revolves around a Power Purchase Agreement (PPA) signed on 08.07.2020, along with a Supplementary PPA dated 25.04.2022, which entails the supply of electricity from a solar photovoltaic grid-interactive power station owned by the Juniper Green to GUVNL.

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Juniper Green, a power producer with a 190 MW capacity solar power project, claims that GUVNL deducted the aforementioned amount from the invoices dated 17.05.2022 without providing a proper justification. Despite inquiries from the Petitioner regarding this deduction, GUVNL allegedly failed to provide satisfactory explanations, except orally stating that it was due to a shortfall in generation in the previous fiscal year, 2021-22, attributed to a reduced Capacity Utilization Factor (CUF).

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According to Juniper Green, the deduction is untenable as per the terms of the PPA. They argue that GUVNL is required to notify the Petitioner of any disputed amount and is obligated to pay 85% of it within a specified time frame, which GUVNL allegedly failed to do. Furthermore, Juniper Green contests GUVNL’s calculation of CUF, stating that it should be based on an annual basis as per the PPA provisions, not merely for eight days as done by GUVNL.

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In response, GUVNL contends that the deduction was made in accordance with the terms of the PPA. They assert that the Petitioner failed to achieve the contracted CUF of 26.7% or even the minimum CUF of 22.70% for the initial contract year, thus justifying the deduction as compensation for the shortfall in generation.

Both parties have presented their arguments before the appropriate authorities, and the matter is under consideration. The Petitioner and GUVNL have been granted two weeks’ time to file their written submissions. The decision regarding the refund sought by Juniper Green is pending and will be made after thorough consideration of the arguments presented by both sides.

This legal dispute highlights the importance of clear contractual terms and adherence to agreed-upon procedures in commercial agreements, particularly in the energy sector where precision and reliability are paramount.

Please view the document here for more details.

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