The Punjab State Electricity Regulatory Commission (PSERC) has approved the Punjab State Power Corporation’s (PSPCL) procurement of 400 MW of solar power from SAEL Industries at a tariff of ₹2.97 (~$0.0340)/kWh.

The Commission determined the adopted tariff was reasonable and conformed to the prevailing market rates. It also observed that PSPCL’s power procurement was necessary and adhered to government regulations.

Background

The petitioner, PSPCL, issued a tender on May 29, 2023, to procure 1,000 MW of solar power from projects from anywhere in Punjab. The quoted ceiling tariff was ₹2.75/kWh (~$0.0315)/kWh.

The distribution company (DISCOM) extended the final bid submission date eleven times from July 10, 2023, to October 25, 2024. It also increased the tariff twice to ₹3 (~$0.0344)/kWh.

Only SAEL Industries submitted a bid for a capacity of 400 MW, quoting a tariff of ₹2.99 (~$0.0342). It had submitted the bid on May 29, 2023.

On December 9, 2024, SAEL agreed to reduce the quoted tariff to ₹2.97 (~$0.0340)/kWh.

On August 8, 2024, the petitioner incorporated the Ministry of Power’s amendments to the Bidding Guidelines, 2023. The amendments were approved by the Punjab government.

The Ministry of New and Renewable Energy (MNRE) mandated that all projects with bid submissions after its December 9, 2024 notification must use solar cells and modules from the Approved List of Models and Manufacturers (ALMM).

PSPCL filed a petition to adopt the ₹2.97 (~$0.0340)/kWh tariff and approve the 400 MW solar power procurement from SAEL.

The petitioner submitted that adopting ₹2.97 (~$0.0340)/kWh will adhere to all applicable regulations. It argued that the 400 MW power procurement would help PSPCL achieve its renewable purchase obligation (RPO).

The DISCOM also contended that the discovered tariff was commensurate with the prevailing market rates in Punjab.

PSPCL highlighted that MNRE’s ALMM notification did not apply to its tender. It submitted that the discovered tariff was reasonable and lower than those applicable to tenders governed by the notification.

The petitioner also submitted that creating a diversified energy portfolio from mixed sources was in its interest.

Commission’s Analysis

PSERC observed that the petitioner’s tendering process was transparent and adhered to all central government regulations. It noted that PSPCL had prepared the bid documents per the Ministry of Power’s guidelines, which the state government approved.

The Commission also observed that the petitioner had provided ample time and opportunity for solar developers to submit their bids.

It acknowledged that the power procurement from SAEL was necessary to meet PSPCL’s RPO requirements.

The Commission agreed that the discovered tariff was reasonable and commensurate with the prevailing market rates in Punjab. It also acknowledged that the tariff was less than those applicable to tenders governed by the ALMM notice.

The Commission approved the discovered tariff of ₹2.97 (~$0.0340)/kWh and the power procurement arrangement for 25 years.

Recently, PSERC rejected a solar power company’s plea seeking compensation to offset the financial and commercial impact of increasing central goods and services taxes on solar cells.

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