An Indian power regulator threatened to fine a local utility 2,000 rupees ($32) a day for breaking renewable energy rules, about the same as the company generated in sales every 2.3 seconds in recent years.
Northern Uttarakhand state’s watchdog warned Uttarakhand Power Corp. that failure to meet obligations to buy clean electricity by March 31 would lead to the daily penalty. In India’s first such fine since its renewable program was set up three years ago, Managing Director S.S. Yadav was also told to pay a 20,000 rupee penalty, the regulator said in an order.
“There have been repeated failures of the respondent company to comply with the directions of the commission,” the regulator said. “Ignorance of the law is no excuse.” Yadav hung up when Bloomberg called his mobile phone seeking comment.
State-run UPC generated 26.9 billion rupees of revenue in the year ended March 2011, up from 20.3 billion rupees the year before, according to the latest earnings on its website. It filed a 2.2 billion-rupee loss in the 2012-2011 fiscal year.
India requires power distributors and large industrial companies like Coal India Ltd. (COAL) and Tata Power Co. (TPWR) to get as much as 10 percent of their energy from renewables. Under a trading program set up in 2011, companies unable to source enough locally must purchase credits from clean-power plants.
Uttarakhand is the first to levy a penalty after state regulators in Punjab, Maharashtra, Chhattisgarh and Goa issued warnings to companies flouting the rules.
To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com