The Bihar Electricity Regulatory Commission (BERC) has issued a suo motu order determining the generic levelized tariffs for biomass, cogeneration, gasifier, municipal solid waste (MSW), and refuse-derived fuel (RDF)-based renewable energy projects for the financial year (FY) 2025–26.

The generic levelized tariffs will apply to projects commissioned on or after April 1, 2025, and remain in effect through March 31, 2026, or until the issuance of the next generic tariff order, whichever is earlier. The tariffs apply to projects located in Bihar and supplying electricity within the state.

The tariff for biomass gasifier projects has been set at ₹9.49 (~$0.104)/kWh after accelerated depreciation (AD), compared to ₹9.12 (~$0.100)/kWh in the previous financial year.

Non-fossil fuel-based cogeneration projects using bagasse have been assigned a tariff of ₹7.77 (~$0.085)/kWh after AD, up from ₹7.40 (~$0.081)/kWh in FY 2024–25. Cogeneration projects using fuels other than bagasse have been allotted a tariff of ₹8.48 (~$0.093)/kWh after AD, compared to ₹8.05 (~$0.088)/kWh in the previous year.

MSW-based projects using Rankine cycle technology have been allotted a tariff of ₹6.48 (~$0.071)/kWh after AD, marginally lower than ₹6.51 (~$0.071)/kWh in the previous financial year.

RDF-based projects have been assigned a tariff of ₹9.23 (~$0.101)/kWh after AD, compared to ₹9.13 (~$0.100)/kWh in FY 2024–25.

For biomass projects based on Rankine cycle technology, the tariff ranges between ₹9.55 (~$0.104)/kWh and ₹10.12 (~$0.111)/kWh after AD, depending on fuel type and cooling configuration. In the previous financial year, the tariff ranged between ₹9.55 (~$0.104)/kWh and ₹10.10 (~$0.110)/kWh, depending on configuration.

Capital Cost Benchmarks

BERC has approved normative capital costs for FY 2025–26, depending on technology and configuration.

For biomass projects based on Rankine cycle technology, capital costs range from ₹638 lakh (~$0.697 million)/MW to ₹744 lakh (~$0.814 million)/MW, depending on biomass type and condenser configuration.

The capital cost for non-fossil fuel-based cogeneration projects has been set at ₹562 lakh (~$0.614 million)/MW, while biomass gasifier projects have been assigned a capital cost of ₹677 lakh (~$0.740 million)/MW.

For waste-to-energy projects, the capital cost for MSW-based projects has been set at ₹1,500 lakh (~$1.640 million)/MW and for RDF-based projects at ₹900 lakh (~$0.984 million)/MW.

The Commission has clarified that these capital cost norms will remain valid for the control period unless reviewed earlier.

Financial Norms

The Commission has adopted a normative debt-equity ratio of 70:30 for tariff computation.

The discount factor used for levelization has been determined at 9.11%, representing the post-tax weighted average cost of capital based on normative debt and equity components.

Return on Equity has been considered at 14% post-tax, grossed up based on the applicable tax rates for the tariff period. The normative loan tenure has been fixed at 15 years.

The interest rate on term loans has been computed at 10.99%, derived from the average State Bank of India marginal cost of funds-based lending rate (MCLR) for a one-year tenor plus the applicable regulatory spread.

Depreciation has been calculated at 4.67% annually for the first 15 years, with the remaining depreciation spread over the balance of the useful life, subject to the regulatory ceiling of 90% of the capital cost.

Useful Life and Levelization

For tariff computation, the useful life has been considered 25 years for biomass, biomass gasifier, and non-fossil-fuel-based cogeneration projects.

For MSW and RDF-based projects, the useful life has been specified as 20 years.

The levelized tariffs have been derived by discounting cash flows over the useful life of each technology using the approved discount rate.

Operating Parameters

The Commission has specified plant load factor (PLF) norms for fixed cost recovery. Biomass projects based on Rankine cycle technology have been assigned a PLF of 80%, while biomass gasifier projects have a PLF of 85%.

Non-fossil fuel-based cogeneration projects have a PLF of 53%. MSW and RDF-based projects have an initial PLF of 65%, with MSW projects increasing to 75% and RDF projects to 80% in subsequent years as stabilization occurs.

Auxiliary power consumption norms vary by technology and configuration. Biomass projects using water-cooled condensers have lower auxiliary consumption compared to air-cooled configurations. Non-fossil fuel-based cogeneration projects have an auxiliary consumption norm of 8.5%, biomass gasifier projects 10%, and MSW/RDF-based projects 15%.

Station heat rates and gross calorific values have also been specified to standardize fuel consumption assumptions for tariff computation.

Fuel Cost Assumptions

For FY 2025–26, the Commission has set  the biomass fuel price at ₹4,472.72 (~$48.90) per metric ton with a normative annual escalation of 3.45%.

The bagasse price has been determined at ₹2,859.32 (~$31.25) per metric ton, while the RDF price for tariff determination will be ₹2,620.49 (~$28.64) per metric ton.

No fuel cost has been considered for MSW-based projects for tariff determination.

Interest on Working Capital

Interest on working capital has been computed at 12.24%, based on the average SBI MCLR for a one-year tenor plus a regulatory margin of 325 basis points.

The working capital requirement includes fuel stock where applicable, operation and maintenance expenses for one month, maintenance spares at 15% of O&M expenses, and receivables equivalent to 45 days of billing.

Accelerated Depreciation Treatment

The Commission has clarified that income tax benefits arising from accelerated depreciation have been factored into tariff determination where applicable.

Generators seeking tariff approval or tariff pass-through are required to submit certified declarations confirming that they have not claimed and will not claim additional depreciation under the Income Tax Act beyond what has been considered for tariff computation.

In October last year, BERC set a target of meeting 43.33% of its energy requirements from renewable sources by the financial year 2030.

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