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APTEL Overturns TNERC’s Banking Charges Hike, Favors Wind Power Producers

The Appellate Tribunal for Electricity (APTEL) has overturned the Tamil Nadu Electricity Regulatory Commission’s (TNERC) 2016 decision that imposed increased banking and wheeling charges on wind power producers. The judgment came in response to appeals filed by Tamil Nadu Spinning Mills and the Indian Wind Power Association, which challenged the Commission's decision to levy charges based on installed capacity and raise banking charges from 5% to 12%.

APTEL criticized TNERC for failing to undertake a comprehensive, data-driven study and for not consulting stakeholders before increasing the charges. It stressed that banking provisions are critical to the financial health and encouragement of wind energy projects and warned that arbitrary hikes could hinder sectoral growth. While the Tribunal reinstated pre-2016 banking charges, it chose not to intervene in the existing 12% charge and instead instructed TNERC to reassess the matter through proper study.

The ruling reaffirms the importance of regulatory transparency and stakeholder engagement in tariff setting. It follows a similar pro-renewables stance APTEL took in June, when it overturned the Andhra Pradesh Electricity Regulatory Commission’s cancellation of a power purchase agreement for Guttaseema Wind Energy’s 60 MW project.