The Maharashtra Electricity Regulatory Commission (MERC) has allowed Mindspace Business Parks, Gigaplex Estate, and KRC Infrastructure and Projects to withdraw their request for approval of a long-term power purchase agreement (PPA) to procure 60 MW of wind-solar hybrid power.

The Commission also directed that the earnest money deposit (EMD) and bank guarantees submitted by the respondents be returned within 15 days.

Background

The three developers sought approval for a PPA and the adoption of a tariff ranging from ₹4.35 (~$0.046)/kWh to ₹4.40 (~$0.047)/kWh in July last year. The procurement involved 60 MW of power from wind-solar hybrid projects for 20 years.

However, in March 2026, the petitioners requested withdrawal of the petition, citing changes in the business landscape of Special Economic Zones (SEZs) and uncertainty in long-term demand forecasting.

The petitioners stated that, given the changing business landscape in SEZs and uncertainty in long-term demand forecasting, it is prudent not to make long-term capacity commitments at this time.

Hence, they proposed canceling the bidding process for 60 MW of power from grid-connected wind-solar hybrid projects. Instead, they considered procuring power through a medium-term framework rather than a 20-25-year PPA, which would offer flexibility to adapt to evolving demand and business conditions.

Sunsure Energy and Sterling Agro Industries opposed the withdrawal.

They contended that the tariff, determined through a transparent bidding process, should be adopted by the Commission and highlighted that significant investments had already been made.

Sterling Agro further argued that once the bidding process had advanced and a letter of award had been issued, the petitioners could not withdraw, citing precedent from an Appellate Tribunal judgment.

They also sought compensation or the return of financial securities if withdrawal was permitted.

Commission’s Analysis

The Commission examined the regulatory framework under Sections 63 and 86(1)(b) of the Electricity Act, emphasizing that it is not merely a ‘post office’ and must ensure tariffs are competitive and aligned with market conditions.

Referring to Supreme Court judgments, the Commission reiterated its duty to assess whether discovered tariffs are market-aligned and to balance the interests of generators, procurers, and consumers.

It noted that the discovered tariffs in the range of ₹4.35 (~$0.046)-₹4.40 (~$0.047)/kWh were significantly higher than recent comparable tariffs approved by the Commission, such as ₹3.42 (~$0.036)-₹3.43 (~$0.037)/kWh and ₹2.59 (~$0.028)/kWh for similar hybrid projects.

The Commission observed that adopting a higher tariff for a long-term 20-year procurement would not serve consumer interest, especially when lower-cost renewable energy options were available.

Last month, MERC modified aspects of its multi-year tariff order, revising time-of-day banking rules and rationalizing the rebate structure to better align with regulatory principles and solar consumption patterns.

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