The Maharashtra Electricity Regulatory Commission (MERC) has dismissed a petition filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) seeking the approval of tariff for 1,170 MW of solar projects to be set up under the Mukhyamantri Saur Krishi Vahini Yojana.

The MSEDCL in its petition had requested for the adoption of tariff in the range of ₹3.16 (~$0.045)/kWh to ₹3.30 (~$0.046)/kWh. The tariffs were discovered in the competitive bidding process for a cumulative capacity of 1,170 MW of solar power projects in order to meet the DISCOM’s solar Renewable Purchase Obligations (RPO).

While going through the submissions made, the commission observed that in a previous petition filed by MSEDCL requesting the commission’s approval for the adoption of tariff for the same 1,170 MW of solar power projects, the MERC had ordered it to renegotiate the tariff with the winning bidders.

MSEDCL had floated district-wise tenders earlier this year to procure power from projects totaling 1,400 MW. However, the DISCOM had only received bids totaling 1,170 MW. Later, MSEDCL approached the MERC for the adoption of tariffs for the following:

• 10 MW which was allocated at a tariff of ₹3.16 (~$0.045)/kWh
• 60 MW which was allocated at a tariff of ₹3.28 (~$0.046)/kWh or ₹3.29 (~$0.047)/kWh
• 1,100 MW which was allocated at a tariff of ₹3 (~$0.042)/kWh

When approached to renegotiate the tariff, only one developer agreed to go down to a rate of ₹3.15 (~$0.044)/kWh while all the others refused.

The commission observed that instead of initiating the process to retender the capacity, MSEDCL is now justifying the higher discovered rate and has requested the commission to adopt the same.

The state commission has noted explicitly that the MSEDCL has not given any justification for the higher tariffs in similar tender conditions (tariff discovered in other auctions for the Mukhyamantri Saur Krishi Vahini Yojana) and has tried to justify the higher rate by comparing and deriving the rates from the bids in non-similar cases. The MERC found that the rate proposed for adoption is clearly not in conformity with the market conditions and therefore, cannot be adopted.

Image credit: Lightsource BP