The Maharashtra Electricity Regulatory Commission (MERC) has approved tariffs of ₹2.52 (~$0.0283)/kWh and ₹2.53 (~$0.0285)/kWh for Maharashtra State Electricity Distribution Company’s (MSEDCL) purchase of 1,475 MW capacity of solar energy from NHPC.

It also approved a trading margin of ₹0.07 (~$0.0007)/kWh.

Background

In June 2023, NHPC issued a tender to set up 3,000 MW of interstate transmission system (ISTS)-connected solar projects across India. The auction’s discovered tariffs were ₹2.52 (~$0.0283)/kWh to ₹2.53 (~$0.0285)/kWh with a trading margin of ₹0.07 (~$0.0007)/kWh.

It sought MSEDCL’s consent to procure power from this project in November 2023. MSEDCL agreed to procure the power at the discovered tariffs.

NHPC signed a power sale agreement (PSA) with MSEDCL in March 2024 for 1,475 MW capacity and approached MERC for tariff approval.

The Commission directed the parties to await the Central Electricity Regulatory Commission’s (CERC) tariff adoption order for NHPC’s ISTS-connected 3,000 MW solar projects. CERC approved tariffs of ₹2.59 (~$0.0003)/kWh and ₹2.6 (~$0.0292)/kWh (including a trading margin of ₹0.07 (~$0.0007)/kWh) requested by MSEDCL in this case.

After the CERC order, MSEDCL again approached MERC to approve the tariffs and the trading margin for the 1,475 MW capacity.

It submitted that the requested tariffs were competitive.

It also contended that the NHPC project will help it meet its renewable purchase obligations (RPO).

Commission’s Analysis

The Commission noted that the tariffs and the trading margin were discovered through a transparent and competitive bidding process.

It acknowledged that approving the procurement from NHPC would help MSEDCL meet its RPO requirements.

MERC approved the PSA between MSEDCL and NHPC, the discovered tariffs, and the trading margin.

However, the Commission observed that MSEDCL is responsible for evacuating power beyond the delivery point and must be vigilant regarding transmission corridor availability to avoid any consequences.

It directed MSEDCL to coordinate with the state transmission utility for the timely and urgent implementation of the planned ISTS capacity program.

Recently, MERC approved the PSA between MSEDCL and NTPC for 300 MW of wind-solar hybrid power at a tariff of ₹3.36/kWh (~$0.038)/kWh.

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