MSEDCL seeking Adoption of Tariff for long term procurement of 700 MW Solar Power from Grid Connected RE Project under ISTS Solar Tranche X-III scheme selected by SECI – EQ
Summary:
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### **Key Prayers by MSEDCL:**
1. Admit the petition under Section 63 of the Electricity Act, 2003.
2. Approve procurement of 700 MW solar power from SECI at a tariff of **₹2.63/kWh** (including a trading margin of ₹0.07/kWh).
3. Approve the executed Power Sale Agreement (PSA) with SECI.
4. Allow the procured solar power to count toward MSEDCL’s **Renewable Purchase Obligation (RPO)** compliance.
### **Background & Proceedings:**
– MSEDCL submitted its petition on **19 December 2024**.
– SECI had offered 3000 MW of solar power under Tranche-XIII and XIV in June 2024.
– After evaluation, MSEDCL consented to procure 700 MW from JSW Neo Energy Ltd., as the project is located in Maharashtra and connected to the intra-state transmission system (InSTS), resulting in a lower landed tariff.
– MSEDCL and SECI executed the PSA on **8 October 2024**.
– MSEDCL filed an Interlocutory Application for early hearing, citing contractual timelines.
– Hearings were held on **18 November 2025** and **28 November 2025**.
– During the hearing, MERC directed MSEDCL to submit a plan for **energy storage** to manage surplus solar generation.
– MSEDCL submitted details on **Battery Energy Storage Systems (BESS)** and **Pumped Storage Projects (PSP)** on 8 December 2025.
### **MERC’s Analysis & Ruling on Key Issues:**
#### **1. Quantum of Power Procurement:**
– **Ruling:** Approved.
– **Reasoning:** The 700 MW procurement is aligned with MSEDCL’s **Resource Adequacy Plan** and is necessary to meet future RPO targets (rising to 43.33% by FY 2029–30).
#### **2. Competitiveness of Tariff:**
– **Ruling:** Approved.
– **Reasoning:** The tariff of ₹2.63/kWh (₹2.56/kWh + ₹0.07/kWh trading margin) was discovered through a **transparent competitive bidding process** and has already been adopted by the **Central Electricity Regulatory Commission (CERC)**. MERC’s role is limited to approving the procurement under Rule 8 of the Electricity Rules, 2005.
#### **3. Trading Margin of ₹0.07/kWh:**
– **Ruling:** Approved, subject to conditions.
– **Reasoning:** The margin is in line with the **Competitive Bidding Guidelines, 2023** and **CERC Trading Licence Regulations**. However, if SECI fails to provide an escrow or irrevocable letter of credit to the generator, the trading margin shall be capped at **₹0.02/kWh**.
#### **4. Utilization of Solar Power:**
– **Ruling:** MSEDCL’s storage plan is adequate.
– **Reasoning:** MSEDCL has contracted:
– **2750 MW / 5500 MWh of BESS** (phased implementation)
– **3500 MW of Pumped Storage capacity**
– These storage systems will store surplus solar energy, improve grid stability, and ensure efficient utilization during off-peak hours.
### **Final Order:**
1. The petition is **allowed**.
2. MERC approves MSEDCL’s procurement of **700 MW solar power** from SECI at a tariff of **₹2.63/kWh** (including trading margin) for a period of **25 years**.
3. The procured solar power shall be counted toward MSEDCL’s **RPO compliance**.
4. The **Power Sale Agreement** between MSEDCL and SECI is approved.
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