The Central Electricity Regulatory Commission (CERC) has approved the adoption of tariffs ranging from ₹2.52 (~$0.0292)/kWh to ₹2.53 (~$0.0294)/kWh for NHPC’s 3 GW grid-connected solar projects. The Commission also approved a trading margin of ₹0.07 (~$0.0008)/kWh.

Background

The petitioner, NHPC, floated a tender for setting up 3 GW interstate transmission system-connected solar projects.

Sixteen bids were received and letters of award were issued to eight successful bidders on December 7, 2023.

However, NHPC delayed filing the tariff adoption petition until September 20, 2024, beyond the 15-day solar guidelines requirement. The petitioner attributed the delay to difficulties in securing agreements with distribution companies (DISCOMs) in Uttar Pradesh and Maharashtra.

NHPC had secured agreements for 1,525 MW with Uttar Pradesh Power Corporation and 1,475 MW with Maharashtra State Electricity Distribution Company (MSEDCL).

The power purchase and sale agreements were signed between March and July 2024.

The petitioner approached the Commission to approve the discovered tariff range of 2.52 (~$0.0292)/kWh to ₹2.53 (~$0.0294)/kWh and condone the 10-month delay in the tariff adoption petition. It also requested approval for a trading margin of ₹0.07 (~$0.0008)/kWh.

The respondents included major solar developers and DISCOMs such as Hazel Hybren (HHPL), Green Infra Clean Wind Technology (GICWTL), and MSEDCL.

HHPL did not object to the tariff adoption but raised concerns over the petition delay, arguing that lenders require tariff approval for financing. It requested a 10-month extension in the scheduled commercial operation date (SCOD).

This respondent also cited ‘changes in law’ issues such as increased basic customs duty on solar components, a new anti-dumping duty on aluminum frames, and higher GST on land leases.

GICWTL demanded recognition of these additional costs. MSEDCL contended that additional charges should not apply to projects commissioned after June 2026.

Commission’s Analysis

The Commission observed that the petitioner’s bidding process adhered to the Ministry of Power’s competitive bidding guidelines. The bid evaluation committee confirmed that the tariff discovery process was transparent and the discovered rates were reasonable.

CERC acknowledged the petitioner’s procedural challenges, but cautioned it to strictly comply with filing deadlines in the future.

It noted that while Clause 10.5 of the solar guidelines allows for an extension if the tariff adoption is delayed beyond 60 days from submission or 120 days from the date of the power sale agreement, HHPL did not cite any specific guideline supporting its plea for an extension due to NHPC’s delay in filing the petition.

Additionally, HHPL argued that NHPC’s delay in approaching the Commission had impacted its financial closure and overall project execution. HPPL also raised concerns regarding a change in the substation location from Bikaner III to Bikaner IV, which it claimed caused further delays beyond its control

The Commission, however, ruled that such issues were beyond the scope of the present tariff adoption proceedings under Section 63 of the Electricity Act. It advised HHPL that it could file a separate petition for adjudication of these concerns.

It also noted that the approved tariff would ensure compliance with renewable purchase obligations for DISCOMs in Uttar Pradesh and Maharashtra.

The Commission approved the tariffs and the trading margin. It held that NHPC’s trading margin of ₹0.07 (~$0.0008)/kWh will be recovered from buying utilities.

It emphasized that future regulatory compliance delays may impact project financing and increase risks for developers and DISCOMs.

Recently, CERC approved the tariffs between ₹3.27 (~$0.037)/kWh and ₹3.32 (~$0.038)/kWh for NTPC to procure 1,500 MW of power from interstate transmission-connected wind-solar hybrid power projects.

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