The Punjab State Electricity Regulatory Commission (PSERC) has approved the continuation of power procurement by Punjab State Power Corporation (PSPCL) from NHPC’s 300 MW solar project at Bikaner in Rajasthan and 100 MW solar project at Khavda in Gujarat, even for capacity commissioned after June 30, 2025.

The Commission ruled that the projects would remain eligible for a full waiver of interstate transmission system (ISTS) charges, provided they are commissioned before June 30, 2026.

Background

The dispute arose because PSERC initially approved a limited waiver for projects commissioned on or before June 30, 2025. PSPCL’s 400 MW power purchase agreement with NHPC was based on that deadline and a ceiling tariff of ₹2.45 (~$0.027)/kWh.

Under this arrangement, NHPC was to supply 300 MW of solar power from its Bikaner project and 100 MW from the Khavda project. Each project was originally scheduled for commercial operation within 30 months of the letter of award, corresponding to April 2024.

However, because of supply chain delays in domestically manufactured solar modules, the implementing agency IREDA granted successive extensions first to September 2024, then to March 2025 and December 2025 for the Bikaner plant, and to March 2026 for the Khavda project.

NHPC began commissioning parts of the Bikaner project in phases, bringing 107.14 MW online in April 2025 and 53.57 MW in June 2025, with more scheduled through September 2025. PSPCL noted that the effective tariff would rise from ₹2.55 (~$0.028) to about ₹2.70 (~$0.03)/kWh if 25% ISTS charges were imposed, but even then, the rate would remain cheaper than prevailing market prices of around ₹3 (~$0.034)/kWh.

PSPCL emphasized that continued procurement was crucial for meeting its renewable purchase obligations and maintaining cost competitiveness. It, therefore, sought the Commission’s permission to buy the balance capacity to be commissioned after June 2025, citing the new CERC amendment that extended ISTS charge waivers to renewable projects with approved time extensions up to June 2026.

NHPC supported PSPCL’s position. It referred to the CERC’s tariff adoption, which had approved ₹2.45 (~$0.027)/kWh for NHPC’s projects. NHPC also pointed out that the CERC’s fourth amendment clearly allowed projects with two extensions of up to six months each beyond June 30, 2025, to retain full ISTS waivers if commissioned before June 30, 2026.

IREDA confirmed that it had granted extensions for both NHPC projects, up to December 31, 2025, for the 300 MW Bikaner project and up to March 2, 2026, for the 100 MW Khavda project, with the approval of MNRE.

Commission’s Analysis

The Commission examined whether the extended projects would still qualify for the ISTS waiver.

PSPCL informed the Commission that NHPC had already commissioned 214.28 MW from the Bikaner plant and was awaiting permission to bring the remaining 85.72 MW online. PSPCL also reported its efforts to obtain a formal clarification from CERC, which did not issue a separate written response.

However, NHPC presented correspondence with CERC stating that the fourth amendment was self-explanatory and that renewable energy projects receiving valid extensions up to June 30, 2026, were eligible for a 100% ISTS charges waiver.

NHPC had discussed the issue with CERC and confirmed that both its Bikaner and Khavda projects met the criteria.

After reviewing all submissions, the Commission concluded that the interpretation of Regulation 13(2)(h) of the CERC amendment left no ambiguity. Since IREDA and MNRE had lawfully extended the scheduled commissioning dates, the NHPC projects tied to PSPCL would continue to enjoy the ISTS waiver.

The Commission also noted that the landed cost of power remained unchanged from the 2023 approval and was still economically favorable for Punjab’s consumers.

Accordingly, PSERC allowed PSPCL to procure the remaining capacity from NHPC’s solar projects that would be commissioned beyond June 30, 2025, and declared them eligible for the full waiver of ISTS charges if commissioned before June 30, 2026.

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