MERC Directs Reduction in Tariff for Solar Agricultural Feeder Program in Maharashtra

A petition was filed citing difficulties in the implementation of Solar Agricultural Feeder Program


Expressing its disagreement with the solar tariff of ₹3.15 (~$0.043), the Maharashtra Electricity Regulatory Commission (MERC) has directed Maharashtra State Power Generation Company Limited (MAHAGENCO/MSPGCL) to reduce the price after taking into account the associated costs relating to land, evacuation of energy, and metering arrangement.

The MERC was hearing a petition filed by MAHAGENCO for the difficulties in the matter of implementation of Mukhyamantri Solar Agricultural Feeder Program and approval of draft power purchase agreement (PPA), and draft power sale agreement (PSA) being executed by MSPGCL with the developer and MSEDCL for agriculture (AG) feeder solar power projects in Maharashtra.

In its petition, MSPGCL proposed for allowance of ₹0.05 (~$0.00068) per unit as administrative charges for the expenses being incurred by MSPGCL for the implementation of the program. MSPGCL had also mentioned that the modalities being adopted for this Solar Agricultural Feeder Program are different than the normal power purchase-related modalities adopted.

MSPGCL stated that it was not in a position to execute the PPA and PSA as the prevailing regulations do not cover the proposed modalities. Therefore, MSPGCL requested the commission to approve execution of PPA and PSA by MSPGCL for all the solar projects being installed under Mukhyamantri Solar Agricultural Feeder Program including the pilot projects at RaleganSiddhi and Kolambi.

MSPGCL had also asked the MERC to approve tariff range of ₹2.99 (~$0.041) per unit to ₹3.20 (~$0.044) per unit for the PSA with MSEDCL.

The MERC has approved the modalities proposed by MSPGCL for PPA and PSA for all projects installed under Mukhyamantri Solar Agricultural Feeder Program and has directed that both MSPGCL and MSEDCL should approach the commission jointly with deviations, if any, in the PPA and PSA.

In its ruling, MERC also rejected MSPGCL’s plea regarding the approval of the administrative charges (Trading margin) of ₹0.05 (~$0.00068) per unit. MERC stated that the MSPGCL can claim prudent administrative expenses as the intermediary procurer of solar energy as part of its ARR.

It is expected that the rates worked out after considering these would be similar to the rates discovered by Maharashtra State Electricity Distribution Company Limited (MSEDCL) on similar terms and conditions.

Mercom previously reported on  MAHAGENCO’s plans to solarize Maharashtra’s agricultural feeders by constructing 1,500 MW of solar project capacity. Capacity of each individual project is expected to range from 2 MW to 50 MW.

Image credit: By Ramnath Bhat [CC BY 2.0], via Wikimedia Commons

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.