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Karnataka Commission Approves Reduced Tarif Rate Of INR2.77/Kwh For KSEBL’s 90MW Solar Power Procurement From NTPC Ltd

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Supreme Court To Examine If Tariff Determined Under PPA Can Be Revised

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In a recent order, Karnataka State Electricity Commission (KSERC) approved reduced tariff rate of INR2.77/Kwh from INR2.97/Kwh for Karnataka State Electricity Board Ltd (KSEBL’s) proposed 90MW solar power procurement from NTPC ltd for 25 years period from the date of the commissioning of the plant.

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Background

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After considering Ministry of Power’s (MoP) notification for “Guidelines for tariff based competitive bidding process for procurement of power from grid connected Solar PV Projects”, dated 03.08.2017 and receiving approval from the state commission for procurement of 200MW solar power, KSEBL invited request for selection (RfS) for procurement of 200MW solar power on long term basis dated 18.09.2020. After subsequent financial bidding and e-reverse auction process, discovered L1-bidders were

1. NTPC Ltd – 90MW @ INR 2.97/Kwh

2. Tata Power Company Ltd – 110MW @ INR 2.97/Kwh

In view of the above context, KSEBL asked for approval of discovered tariff of INR2.97/Kwh from the commission. Subsequently, commission gave order for signing of initial power purchase agreement (PPA) between L1-bidder and KSEBL. Accordingly, KSEBL issued letter of acceptance (LOA) to NTPC ltd and asked for signed LOA for further processing of PPA.

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In the meantime, NTPC ltd repeatedly asked for signed final PPA from the KSEBL and started site mobilization, module procurement work on the basis of received LOA from KSEBL. NTPC also got grant of connectivity of 90MW from CTUIL and application of long term access agreement (LTA) held up due to the delay in issuance of signed final PPA.

In response to NTPC’s repeated prayers, KSEBL informed about their intent to reduce agreed tariff rate from INR 2.97/Kwh to INR 2.44/kwh. The reduced tariff rate was in range of available tariff rate from SECI.

After receiving KSEBL’s arbitrary roll back from agreed tariff rate to reduced one, NTPC ltd filed a petition to state commission for adoption of agreed tariff rate at 2.97/Kwh for the 90MW solar capacity procurement.

Commission’s Analysis & Decision

Commission observed that, after receiving respondent’s intention for reduced tariff rate, the petitioner mutually offered reduced tariff rate at INR 2.77/Kwh for 90MW capacity. Further, it was observed that offered reduced tariff rate INR2.77/Kwh was mutually accepted between petitioner and respondent. Also, other L1-bidder of the total 200MW capacity, Tata Power subsidiary, mutually agreed to reduced tariff rate at INR2.44/Kwh.

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Thus in view of the above context, commission agreed in approving of reduced tariff rate at INR2.77/Kwh for entire 90MW solar power procurement from NTPC’s Anta Solar PV plant. Commission also noted any occurrence of change-in-law event and its impact on the project, would be decided by the commission.

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