The Jharkhand State Electricity Regulatory Commission (JSERC) has approved the power sale agreement (PSA) between Bokaro Steel (BSL), a Steel Authority of India (SAIL) company, and Solar Energy Corporation of India (SECI) for purchasing 100 MW of solar power.

The Commission approved the PSA subject to Bokaro Steel procuring solar power at ₹2.85 (~$0.0327)/kWh, which includes ₹2.50 (~$0.0287)/kWh as the solar power developer (SPD) rate, ₹0.07 (~$0.0008)/kWh as SECI’s trading margin, and ₹0.28 (~$0.0032)/kWh as the tentative financial impact due to basic custom duty (BCD) and GST.

The Commission also noted that the interstate transmission system (ISTS) charges will not be applicable on the power purchase if the project is commissioned by June 30, 2025, under the CERC Regulation, 2023.

Background

The petitioner, Bokaro Steel, must meet its renewable purchase obligation mandates per JSERC regulations. The plant currently sources power from Bokaro Power Supply Company through captive generation from the Damodar Valley Corporation (DVC).

Bokaro Steel and SECI entered into a PSA for purchasing 100 MW of solar power.

The petitioner approached the Commission to approve the PSA, submitting that purchasing power from SECI would enable compliance with its renewable purchase obligation requirements while ensuring cost stability.

The cost of solar power under the PSA was determined at ₹2.85 (~$0.0327)/kWh for 25 years, and the existing power cost from DVC was ₹4.05 (~$0.0465)/kWh and is expected to increase over time.

The petitioner argued that approving the PSA would also provide financial benefits due to the ISTS charges exemption for projects commissioned before the June 30, 2025, deadline, under the CERC Regulations.

Commission’s Analysis

JSERC noted that the PSA between the petitioner and SECI aligns with national renewable energy goals and ensures compliance with state regulations while offering long-term cost stability.

The Commission acknowledged that approving the PSA would provide financial relief to Bokaro Steel and consumers in Bokaro Steel City by securing a fixed solar power tariff, compared to the rising costs of conventional power from DVC.

It approved the PSA, subject to Bokaro procuring power from the project at ₹2.85 (~$0.0327)/kWh, with the tariff components clearly defined.

The Commission also directed that the power purchase will not attract any ISTS charges for 25 years, per the Ministry of Power’s notification on the CERC Regulations.

In June 2024, JSERC recognized Bokaro Steel’s cogeneration plants as fulfilling renewable purchase obligations, citing their environmental benefits such as reduced emissions and fossil fuel conservation.

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