MERC Approves Rs 2.52/kWh Tariff for Procurement of 500 MW Wind Power

MERC has approved the tariff of Rs 2.52/kWh for the procurement of 500 MW wind power as requested by the MSEDCL in its last petition.

The Maharashtra Electricity Regulatory Commission (MERC) has in its latest order approved the tariff of Rs 2.52/kWh for procurement of 500 MW wind power as requested by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) in its last petition.

The state Discom had filed a petition with the state commission seeking the approval of the adoption of the tariff rate arrived at during the competitive bidding process for its 500 MW wind tender. The Discom advocated that it received bids for only 7 MW at a tariff rate of Rs 2.52/kWh, when the tender was issued in June this year.

In its petition, MSEDCL had requested the state commission to adopt the tariff discovered through the competitive bidding process held by MSEDCL for the procurement of 7 MW wind power from intra-state wind projects whose energy purchase agreements (EPAs) with MSEDCL had expired. Additionally, the Discom was also seeking approval for signing of the Power Purchase Agreement (PPA) with the successful bidders at the competitively discovered tariff, and to allow MSEDCL to claim such procurement for the fulfilment of MSEDCL’s renewable purchase obligation (RPO).

In its order, the commission approved the procurement of 7 MW of wind energy at a tariff rate of Rs 2.52/kWh and allowed the bidders to enter into an EPA for eight years. The commission also permitted MSEDCL to use the procured wind power for meeting its non-solar RPO targets. The commission noted in its finding that the rate of Rs 2.52 /kWh that was discovered through competitive bidding was the same that it has previously allowed for purchasing wind power for short-term from generators whose EPAs had expired.

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Earlier this month, the Maharashtra Energy Regulatory Authority managed to unite almost the complete developer community in the state after releasing its draft regulations for the state. In the spotlight was its proposal to shift to gross metering for solar rooftop power, which has been met with outright condemnation. In fact, some of the developers went as far as to say that this was a violation of the Indian Electricity Act  2003.