The Maharashtra Electricity Regulatory Commission (MERC) has approved Tata Power Company – Distribution’s (TPC-D) adoption of tariffs of ₹3.27 (~$0.0394)/kWh and ₹3.28 (~$0.0395)/kWh discovered through competitive bidding for the procurement of 225 MW of wind-solar hybrid power along with 150 MW additional capacity under the ‘greenshoe’ option to meet its renewable purchase obligations (RPO).

Background

In November 2022, MERC had granted approval to TPC-D to start bidding for 225 MW of hybrid renewable power to meet its future electricity demand and renewable purchase obligations (RPO).

Accordingly, TPC-D floated a tender for 225 MW capacity on June 26, 2023, on the central government’s bidding portal.

On September 5, TPC-D conducted an e-reverse auction, after which tariffs of ₹ 3.27 (~$0.0394)/kWh and ₹3.28 (~$0.0395)/kWh were discovered for the lowest bidders.

TPC-D then awarded Juniper Green Energy (JGEPL) 75 MW capacity at ₹3.27 (~$0.0394)/kWh and Tata Power Renewable Energy (TPREL) 150 MW capacity at ₹3.28 (~$0.0395)/kWh pending power purchase agreement signing.

In August 2023, MERC had published draft regulations raising the RPO obligations on power distribution companies in Maharashtra. To meet this increased RPO and future power demand, TPC-D incorporated the ‘greenshoe’ option in the ongoing bidding.

TPREL offered an additional 150 MW capacity under this option at the lowest tariff of ₹3.27 (~$0.0394)/kWh based on TPC-D’s request. TPC-D then filed a petition with MERC for the adoption of tariffs discovered in the bidding along with the greenshoe capacity.

Commission’s Analysis

During the regulatory approval proceedings, MERC observed that TPC-D had followed a transparent, competitive bidding process as per guidelines under the Electricity Act 2003.

The discovered tariffs were also found to be lower than recent wind-solar hybrid power tariffs and TPC-D’s approved power purchase costs. Considering these factors, MERC approved the adoption of tariffs discovered through competitive bidding.

MERC also gave its go-ahead to procure an additional 150 MW hybrid power capacity under the greenshoe option from TPREL at a tariff of ₹3.27 (~$0.0394)/kWh. It then directed TPC-D to sign PPAs with JGEPL and TPREL.

Late last year, MERC directed TPC-D to compensate TPGEL ₹491.2 million (~$5.89 million) against the costs incurred due to the hike in Goods and Service Tax rate for its wind-solar hybrid and wind project. MERC accepted TPGEL’s petition, noting the absence of objections from the TPC-D.

Earlier this year, the commission directed the Maharashtra State Electricity Distribution Company to reimburse Imagicaa World Entertainment, a theme park owner in Maharashtra, for excess demand penalty charges plus interest incurred due to renewable energy open access levies.

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