Karnataka Extends Generic Tariff of ₹7.08/kWh for Waste to Energy Projects Until 2020

The state has extended the applicability of the tariff set in 2016 which was valid only until March 2018


In a recent order, the Karnataka Electricity Regulatory Commission (KERC) has extended the validity of the generic tariff it had set for municipal solid waste (MSW) projects in the state. A tariff of ₹7.08 (~$0.10)/kWh was set by the commission back in 2016 which was applicable on all of the state’s MSW-based power projects which were commissioned between September 19, 2016, to March 31, 2018.

This extension came after the commission reviewed a petition by the Bangalore Municipal Solid Waste Limited (BMSWL) which had requested for the extension of the tariff order for its project.

In a letter dated March 16, 2018, BMSWL had written to the commission stating that Bruhat Bengaluru Mahanagara Palike (BBMP) was yet to hand over the alternative land required for the project and therefore, the tariff’s validity should be extended.

The commission, in turn, had noted that since no other waste to energy projects were established in Karnataka until then, there would be no significant changes in the parameters considered for fixing the tariff. Considering this, the KERC added that there’s no point in initiating the procedure for determining the tariff of waste-to-energy projects. Consequently, the commission considered it necessary to extend the tariff order for a year from April 1, 2018, up to March 31, 2019.

Considering the present market rates and the Central Electricity Regulatory Commission (CERC) regulations, the commission had issued a paper in March 2019, seeking the suggestions and views from the stakeholders. Proposing a tariff of ₹5.65 (~$0.08)/kWh, the commission held a public hearing in which the Bangalore Electricity Supply Company (BESCOM) proposed to reduce the parameters such as the capital cost, interest on loan, interest on working capital, expenses, depreciation, in order to come to a lower tariff.

After the public hearing, the KERC sought the views of Karnataka Power Corporation Limited (KPCL), Urban Development and Urban Housing Development (UDD), and BBMP. Only KPCL responded to the query.

In its response, the KPCL requested the commission to retain the existing tariff of ₹7.08 (~$0.10)/kWh, saying that it had already taken up a 5 MW WtE project at Bidadi. The KPCL further mentioned that any reduction in the existing tariff would adversely affect the project.

Following this, the Commission re-examined the issue and said that though the tariff of ₹7.08 (~$0.10)/kWh was fixed in 2016, no waste to energy projects have been initiated in the state except this one, and therefore it felt that the reduction in the existing tariff might not attract new project developers in the state.

Therefore, to encourage new waste to energy projects in Karnataka, the commission decided to retain the existing tariff for a period of one year beginning from April 1, 2019, to March 3, 2020.

In a similar case, the Andhra Pradesh Electricity Regulatory Commission (APERC) previously approved a tariff of ₹7.5 (~$0.011)/kWh for 5 MW  of waste to energy projects each belonging to Anantapur MSW Private Limited and Envikare Green Energy Private Limited.

Meanwhile, in the neighboring state of Tamil Nadu, the state’s electricity regulatory commission (TNERC) has set the generic tariff for the procurement of power from municipal solid waste projects in the state at ₹6.28 (~$0.088)/kWh without accelerated depreciation and ₹5.90 (~$0.082)/kWh with accelerated depreciation applicable effective from April 1, 2019.

Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.