The Maharashtra Electricity Regulatory Commission (MERC) recently approved the voluntarily offered tariff of ₹2.56 (~$0.032)/kWh for the supply of 300 MW of wind-solar hybrid power by TP Saurya, a subsidiary of Tata Power, to Maharashtra State Electricity Distribution Company (MSEDCL).

It also directed the parties to sign the power purchase agreement (PPA) within 15 days and submit a copy.

TP Saurya had filed a petition to review an earlier order passed by the Commission.

Background  

MSEDCL had issued a Request for Selection (RfS) to procure 500 MW wind-solar hybrid power on a long-term basis through a competitive bidding process from grid-connected inter and intrastate projects.

Tata Power and Azure Power were declared winners in the MSEDCL’s auction. The discovered tariff was ₹2.62 (~$0.033)/kWh.

Later, MSEDCL filed a petition to adopt the tariff discovered through competitive bidding. However, the Commission didn’t approve the tariff of ₹2.62 (~$0.033)/kWh and proposed the tariff of ₹2.49 (~$0.031)/kWh.

TP Saurya, in its submission, said that the cost of steel had increased drastically from the time of the bid submission to the date of the Order. The steel price increase had led to a 3.35% increase in the project’s total cost, amounting to a ₹0.07 (~$0.0008)/kWh impact on the tariff.

MSEDCL argued that it had informed TP Saurya that any relaxation in time regarding matching the tariff of ₹2.49 (~$0.031)/kWh should be subjected to the Commission’s approval. It was clarified that the waiver of interstate transmission losses could not be allowed, as that would be a deviation from the terms and conditions of the RfS.

TP Saurya, in the present petition, requested the Commission to reconsider its earlier Order and revise the tariff to ₹2.56 (~$0.032)/kWh.

Commission’s analysis

The Commission noted that during the bidding exercise, the discovered tariff was ₹2.62 (~$0.033)/kWh, and now TP Saurya was proposing a discounted tariff of ₹2.56 (~$0.032)/kWh.

The Commission said that the discovered tariff was on the higher side, and accordingly, the petition of MSEDCL for tariff adoption was rejected. Approaching SECI was one of the suggested options.

MSEDCL had stated that SECI had orally communicated that the hybrid power capacity under SECI’s tranche IV had been exhausted. The tariff of ₹2.53 (~$0.031)/kWh-₹2.54 (~$0.032)/kWh was discovered in SECI’s reverse auction for Tranche V. The landed cost of such power at Maharashtra state transmission utility periphery would be ₹2.69 (~$0.033)/kWh-₹2.70 (~$0.034)/kWh.

“Hence, considering that TP Saurya in the present petition has voluntarily offered a tariff of ₹2.56 (~$0.032)/kWh, which is lower than the discovered tariff of ₹2.62 (~$0.033)/kWh, the Commission is inclined to adopt such a tariff,” the state regulator said.

In March this year, MERC allowed MSEDCL to adopt the tariff discovered through a competitive bidding process to procure power from 500 MW grid-connected solar projects.

Earlier, MERC had allowed Adani Electricity Mumbai Limited to renegotiate a lower tariff for 700 MW of grid-connected wind-solar hybrid power.

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