The Punjab State Electricity Regulatory Commission (PSERC) has dismissed a review petition filed by the Punjab State Power Corporation (PSPCL) seeking reconsideration of its proposal to procure 1,450 MW of solar power from SJVN.

The Commission held that PSPCL failed to demonstrate any error in its earlier decision or present new evidence that would justify a review. It emphasized instead that PSPCL could not assure that procurement parameters, including cost and timelines, would remain unchanged.

Background

In 2024, PSPCL sought approval to procure 1,450 MW of solar power through SJVN at tariffs of ₹2.52 ($0.0286)/kWh and ₹2.53 ($0.0287)/kWh, with an additional trading margin of ₹0.07 (~$0.0008)/kWh payable to SJVN, for 25 years. The Commission rejected the proposal in November 2024, finding the cost higher than its ceiling tariff and therefore unreasonable for consumers.

PSPCL filed a review petition in January 2025, arguing that the discovered tariffs were among the lowest available at the time, that comparisons with past tenders were misleading due to global price fluctuations, and that renewable power offered fixed costs over 25 years compared to rising costs of conventional generation. It also argued that concerns regarding transmission capacity were misplaced, as capacity would expand in line with demand growth.

SJVN supported PSPCL, noting that the Central Electricity Regulatory Commission had already approved the tariffs under Section 63 of the Electricity Act, 2003, and that the procurement had resulted from a transparent and competitive process. It warned that disallowance would undermine projects where contracts had already been signed.

However, the Commission had recorded that delays in regulatory approval had already led to developers withdrawing or seeking alternative buyers. GRT Jewellers terminated its contract, and Furies Solren sought substitution, indicating that supply would be possible only by 2027, while Solarcraft and JSW Neo Energy expected delivery no earlier than 2030.

As a result, PSPCL itself acknowledged that the landed cost of power had risen from the originally proposed range of ₹2.84 (~$0.0322) to 2.85 (~$0.0323)/kWh to nearly ₹3.29 (~$0.0373) to 3.30 (~$0.0374)/kWh.

Commission’s Analysis

The Commission noted that neither PSPCL nor SJVN could assure that the procurement parameters, including the final cost, would remain unchanged. It held that the arrangement was no longer the same as that presented in the original petition.

It also rejected PSPCL’s claim that a subsequent discovery of a ₹2.99 (~$0.0339)/kWh bid in an intrastate tender constituted new evidence, stating that it reflected prevailing market conditions at a later date and was not grounds for review.

The Commission was critical of SJVN’s position. While SJVN justified its margin based on assumed risks, it simultaneously disclaimed responsibility for transmission delays and connectivity issues. It reiterated that PSPCL could have conducted its own tendering process without paying a cumulative trading margin of about ₹6.2 billion (~$70.2 million) over 25 years.

The Commission ruled that PSPCL’s petition did not establish an error apparent on the record or the discovery of new evidence and instead amounted to an appeal in disguise.

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