The Uttar Pradesh Electricity Regulatory Commission (UPERC) has disapproved three standardized power purchase agreements (SPPAs) for the procurement of 32.5 MW of bagasse-based power from generators by the Uttar Pradesh Power Corporation Ltd. (UPPCL).

The UPPCL had filed three separate petitions seeking the approval of SPPA to procure bagasse-based power.

Firstly, the UPPCL had petitioned the UPERC seeking its approval to procure 23 MW of bagasse-based power from DSCL Sugar for a 10-year period. The power would be evacuated through existing transmission system. The UPPCL had proposed a provisional tariff of ₹4.63 (~$0.07)/kWh (after the reduction of transmission cost of ₹0.18 (~$0.002)/kWh) until the discovery of the lowest tariff for the procurement of such power in an auction conducted by UPPCL.

Secondly, the UPPCL had petitioned the commission seeking its approval to procure 6 MW of bagasse-based power from Tikaula Sugar Mills for a 20-year period. The power would be evacuated through the existing transmission system. The UPPCL had proposed a provisional tariff of ₹4.63 (~$0.07)/kWh (after the reduction of transmission cost of ₹0.18 (~$0.002)/kWh) until the discovery of L1 tariff for the procurement of such power in an auction conducted by the UPPCL.

Lastly, the UPPCL had also petitioned the UPERC to approve the procurement of 3.5 MW of bagasse-based power from Superior Industries Limited for a 20-year period. In this case, it was proposed first year tariff would be ₹ 5.56 (~$0.08)/kWh and the PPA duration would be for 12 years (extendable by 20 years) with a levelized tariff of ₹6.19 (~$0.09)/kWh.

In all the above three cases, the UPERC found that when the UPPCL had initiated the process of competitive bidding for the procurement of power, it will be unfair to enter bilateral agreements with mutual consent as it will undermine the sanctity of the bidding process, lead to unfair pricing, and give the generator advantage.

Instead, the UPERC has directed the UPPCL to finalize the bidding process at the earliest for the procurement of bagasse-based power.

Recently, the Ministry of New and Renewable Energy (MNRE) amended clauses in the policy to support the promotion of biomass-based cogeneration projects in sugar mills and other industries in the country up to March 2020. MNRE had announced the program in May 2018.