The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the power sale agreement (PSA) and supplementary power sale agreement (SPSA) between Uttar Pradesh Power Corporation (UPPCL) and National Hydroelectric Power Corporation (NHPC) for procuring 1,525 MW of solar power.

Background

NHPC, designated by the Ministry of New and Renewable Energy (MNRE) as an intermediary procurer or renewable energy implementing agency, conducted a competitive bidding process for 3,000 MW of interstate transmission system (ISTS)-connected solar projects.

Initially after the tender, the petitioner, UPPCL, was to procure 1,500 MW of solar power, but a further 25 MW was added through an SPSA, increasing the total purchasing capacity to 1,525 MW.

The additional 25 MW, initially allocated to the Military Engineering Services (MES), was reallocated to the petitioner after MES failed to sign the agreement.

Following the allocation, UPPCL approached UPERC, seeking approval for its PSA and SPSA with NHPC and the discovered tariff. NHPC stated that the Central Electricity Regulatory Commission (CERC) had already adopted the discovered tariff of ₹2.52 (~$0.029)/kWh in an earlier order.

UPPCL submitted that the agreements would help meet the state’s RPO targets and optimize the power purchase cost for consumers.

Commission’s Analysis

UPERC approved the PSA and SPSA, considering UPPCL’s requirement to meet its RPO targets.

The Commission noted procedural issues with NHPC proceeding with the 3,000 MW bid quantum without prior approval from procurers, which caused delays. It advised NHPC to obtain the procurer’s consent before initiating the bidding process in the future.

Additionally, the Commission approved the procurement of 1,525 MW of solar power at the requested tariff of ₹2.52 (~$0.029)/kWh, with a trading margin of ₹0.07 (~$0.00081)/kWh.

However, to safeguard solar power developers, the Commission held that if NHPC fails to provide an escrow mechanism or an irrevocable, unconditional revolving letter of credit, the trading margin would be limited to ₹0.02 (~$0.00023)/kWh.

The Commission instructed UPPCL to comply with its earlier order by negotiating future trading margins below ₹0.07 (~$0.00081)/kWh for long-term PPAs with intermediaries or trading licensees.

Recently, UPERC approved NIDP Developers’ request for a tariff of ₹5.95 (~$0.07)/kWh for procuring 5 MW of bagasse-based round-the-clock (RTC) power between April 1, 2025, and July 31, 2025.

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