Maharashtra Commission Approves a Tariff of ₹3.10/kWh for 7 MW of Solar Projects

MSEDCL and MSPGCL had filed a petition before the state commission

September 13, 2019


The Maharashtra State Power Generation Company Limited (MSPGCL) and Maharashtra State Electricity Distribution Company Limited (MSEDCL) recently approached the Maharashtra Electricity Regulatory Commission (MERC) seeking its approval for the adoption of ₹3.10 (~$0.04323)/kWh as the tariff for the long-term procurement of power from a 7 MW solar project.

The project has been allotted under the state program called Mukhyamantri Saur Krishi Vaahini Yojana and was developed by Gro Solar Energy Private Limited.

The two petitioners also sought the inclusion of “Change in Law” and the approval of the draft power supply agreement (PSA) and power purchase procurement (PPA) of the project.

According to the petition, “MSEDCL is fulfilling non-solar and solar RPO (renewable purchase obligation) target by way of purchase of non-solar and solar RECs (renewable purchase certificates). However, considering the future RPO targets, MSEDCL needs to procure additional renewable power for the fulfillment of its RPO targets to accommodate the actual power in the system rather than to rely on RECs”.

As the implementing agency for the state’s solar program, MSPGCL had undertaken the development of the solar projects by inviting interested bidders, developers, and landowners for setting up solar power projects of capacities up to 100 MW at different locations. The projects are being set up on private lands to cater to the electrical load of agricultural feeders in Vidarbha, Marathwada, Western and Northern regions of Maharashtra on pilot basis.

In response to the Expression of Interest (EoI), a total of 48 bidders had submitted their proposals. Out of 48 bidders, only four bidders qualified for the reverse bidding process. Reverse bidding with the base tariff rate of ₹3.30 (~$0.046)/kWh was carried out online in June 2018. MSPGCL further called the qualified bidders for negotiation.

Gro Solar Energy Private had requested the commission to consider the project capacity of 7 MW instead of 5 MW as they had already obtained grid-connectivity. The scheduled commercial operating date (SCOD) for the 7 MW solar power project is 13 months from the effective date, which is as per the provision of the draft PSA.

Meanwhile, MSEDCL had submitted its consent for the tariff rate of ₹3.10 (~$0.043)/kWh for the 7 MW solar project subject to approval from the commission and had submitted draft PSA for approval. Therefore, MSPGCL and MSEDCL through this petition requested the commission to approve the adoption of the tariff and the commission in its order has accorded its approval to the tariff.

Regarding the deviations sought in the draft PSA and PPA, the commission noted that the project selected through the same EoI process should have identical PPA and PSA.

The commission has also ordered that the changes in the power purchase agreement and the power sale agreement as approved by the commission for EoI-based projects will be applicable to present case as well.

The commission has asked that the solar power procured from the projects will be counted towards the fulfillment of MSEDCL’s solar RPO. 

In August, the MERC had dismissed a petition filed by MSEDCL seeking the approval of a higher tariff for 1,170 MW of solar projects to be set up under the Mukhyamantri Saur Krishi Vahini Yojana. The MSEDCL in its petition had requested for the adoption of tariff in the range of ₹3.16 (~$0.045)/kWh to ₹3.30 (~$0.046)/kWh. The tariffs were discovered in the competitive bidding process for a cumulative capacity of 1,170 MW of solar power projects to meet the DISCOM’s solar RPO.

Image credit: REC Group (USA)

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.