**CERC Denies CESC’s Tariff Adoption for Wind-Solar Hybrid Power**
The Central Electricity Regulatory Commission (CERC) has turned down a petition from CESC Ltd, which sought approval for a tariff related to the long-term procurement of 300 MW of power from grid-connected wind-solar hybrid projects. The rejection was based on the company’s failure to adhere to competitive bidding guidelines.
CESC aimed to adopt a tariff of ₹3.81 per kWh for this hybrid power procurement. However, the CERC noted that the utility did not secure prior approval for deviations in the bidding process from the appropriate authority, which should have been the central government rather than the West Bengal government. In its ruling, the CERC stated, “We reject the adoption of the tariff so discovered, as the petitioner has not complied with the bidding guidelines under Section 63 of the Electricity Act. The petitioner may go for re-bidding, if so advised, strictly in accordance with the guidelines issued under Section 63 of the Act.”
The tender for procuring 150 MW of wind-solar hybrid power, with an option for an additional 150 MW, was issued on November 8, 2024, to fulfill CESC’s renewable purchase obligations. The project is proposed to be located in Mandsaur, Madhya Pradesh, with the final tariff determined through competitive bidding and an e-reverse auction held on December 27, 2024. Purvah Green Power Pvt Ltd, a subsidiary of CESC, was the successful bidder for the entire 300 MW capacity.
Despite requests for comments, CESC did not respond by the time of this report. The Commission highlighted that CESC was aware from a previous case (Petition No. 365/AT/2024) that any deviations in inter-state transmission system (ISTS)-connected projects required approval from the central government. Nevertheless, CESC sought approvals from the West Bengal government instead. The Commission also pointed out that CESC misled the state government by not disclosing the ISTS nature of the project and continued the tender process despite knowing the requirement to approach the Centre.
The order emphasized, “The Commission had condoned this requirement once as an exception, but cannot make the exception a rule.” It further stated that accepting CESC’s request would contradict the principles outlined in Section 63 of the Electricity Act, 2003.
CESC defended the higher-than-average tariff by highlighting two advantages in the winning bid: a projected Capacity Utilisation Factor (CUF) of 50%, significantly higher than the typical 30% for similar hybrid projects, and a commitment to complete the project within 20 months, shorter than the usual 24-month timeline. CESC argued that this could lead to potential savings of ₹0.02 per kWh.
The Commission also noted concerns regarding the awarding of the entire 300 MW capacity to a related party, raising questions about the competitive nature of the bidding process.
**FAQ**
**What was the reason for CERC’s rejection of CESC’s tariff adoption?**
CERC rejected CESC’s tariff adoption due to non-compliance with competitive bidding guidelines and failure to obtain necessary approvals from the central government for deviations in the bidding process.
