The Madhya Pradesh Electricity Regulatory Commission (MPERC) has approved the tariff of ₹2.94 (~$0.0336)/kWh discovered in the fourth and fifth auctions conducted by Madhya Pradesh Urja Vikas Nigam (MPUVNL) under Component C of the PM-KUSUM.

The Commission also directed the signing of power purchase agreements between the developers and Madhya Pradesh Power Management Company (MPPMCL).

Regarding the sixth auction, the Commission kept the matter pending, stating that the issues concerning connectivity arrangements and the applicability of central financial assistance must first be reconciled between the petitioner and the respondent. Only after this process will the Commission consider adoption of tariffs discovered in the sixth auction, which were in the range of ₹2.42 (~$0.0277) to ₹2.55 (~$0.0291)/kWh.

Background

MPUVNL filed the petition seeking approval for tariffs discovered through competitive bidding in the fourth, fifth, and sixth tenders conducted under PM KUSUM’s feeder-level solarization program.

The fourth tender was floated in January 2023 and discovered a tariff of  ₹2.94 (~$0.0336)/kWh for 82.9 MW of capacity. Power purchase agreements were finalized for 75.4 MW. The fifth tender was issued in September 2023 and also closed at  ₹2.94 (~$0.0336)/kWh for 157.4 MW of awarded capacity. The sixth tender, floated in September 2023 on a cluster-based model in Agar and Sagar districts, discovered tariffs of ₹2.42 (~$0.0277) / kWh for Agar and ₹2.55 (~$0.0291)/kWh for Sagar, against a target of 400 MW.

MPPMCL did not object to the adoption of tariffs in the fourth and fifth tenders. However, it raised several concerns about the sixth auction. It pointed to the absence of clarity on connectivity to substations, questioning whether developers would be connected at the 33/11 kV level or at 132/33 kV substations.

It also noted uncertainty about the availability of central financial assistance in light of revised guidelines issued by the Ministry of New and Renewable Energy in 2024. The respondent argued that without clear details on connectivity and subsidy support, it could not accept the sixth tender’s tariff. It also warned of risks of delay in project commissioning since the PM-KUSUM has a sunset date of March 31, 2026.

MPUVNL maintained that the sixth auction had followed due process and that discovered tariffs were competitive. However, it acknowledged the need for reconciliation of outstanding issues with the respondent before seeking final adoption.

In the meantime, it requested the Commission to pass a partial order approving the undisputed tariffs from the fourth and fifth tenders.

Commission’s Analysis

The Commission noted that the fourth and fifth tenders were undisputed and that both the petitioner and respondent agreed to the adoption of the discovered tariff of  ₹2.94 (~$0.0336)/kWh. It found that these tenders had been conducted transparently through competitive bidding in accordance with Section 63 of the Electricity Act. It was therefore concluded that the tariffs from the fourth and fifth tenders should be adopted and that power purchase agreements must be signed without further delay.

On the sixth auction, the Commission directed MPUVNL and MPPMCL to reconcile their differences, clarify connectivity arrangements, and confirm the position of central financial assistance under the revised guidelines. Only then would the Commission consider a separate petition for adoption of the sixth auction tariffs.

Madhya Pradesh targets to achieve 50% of its annual power consumption from renewable energy resources by 2030.

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