Ceiling Tariff of ₹3.50/kWh to Apply for Fossil Fuel-Based Cogeneration Projects in Maharashtra

No concession on wheeling or open access charges

January 21, 2019


The state of Maharashtra has specified an upper ceiling tariff of ₹3.50 (~$0.049)/kWh for competitive bidding to procure power from fossil fuel-based cogeneration projects in the state.

Specifying the tariff in its latest order, the Maharashtra Electricity Regulatory Commission (MERC) stated that the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) will be the be the nodal agency to conduct competitive bidding on behalf of all distribution licensees (DISCOMs) in the state when it comes to procurement from fossil fuel-based cogeneration projects.

The commission’s order came while it was examining a petition filed by Lloyds Metals & Energy Ltd. The firm had requested the state commission to direct the DISCOMs to compulsorily procure 100 percent power produced from all the waste-to-energy plants in the state at the tariff determined by MERC, and in the ratio of their procurement of power from all sources including their own.

Lloyds had also requested the commission to fix the wheeling charge at 25 percent of the applicable wheeling charge for open access consumers purchasing power from cogeneration sources of energy and to fix other open access charges as applicable to renewable sources of energy.

After examining the petition and submissions, the MERC stated that relative share of procurement of such power will be apportioned among all the DISCOMs in proportion of their transmission capacity. Each DISCOM will provide its consent on the required capacity based on its own due diligence.

The Maharashtra commission also clarified that the power procured from fossil fuel-based cogeneration projects will not be deducted from the total consumption of the obligated entities for their renewable purchase obligation (RPO).  It did not provide any concession on wheeling charges or any other open access charges for the procurement of power from fossil fuel-based cogeneration projects.

The commission has also ordered the MSEDCL to prepare standard bidding document and to submit them for its approval within six months of this order.

In a recent order, the MERC clarified that open access consumers can avail open access throughout the year and are entitled for adjustment of the banked units if it sources power from the same generator.

Image credit: MNRE