KERC Revises APPC to ₹5.54/Unit for FY25, Notifies Provisional Rate for FY26

The Karnataka Electricity Regulatory Commission (KERC) has made key announcements regarding the Average Pooled Power Purchase Cost (APPC) for the financial years 2024-25 and 2025-26. Earlier, through a Gazette notification dated April 3, 2024, KERC had provisionally fixed the APPC at Rs. 4.93 per unit for the financial year 2024-25. This was done under Clause 7(c) of the KERC (Procurement of Energy from Renewable Sources) Regulations, 2011. However, this rate was subject to revision based on the actual power purchase data from the electricity supply companies, known as ESCOMs.

Now that the ESCOMs have finalized their accounts for the year 2023-24, the actual APPC for the financial year 2024-25 has been determined to be ₹5.54 per unit. As a result, the previously fixed provisional APPC of ₹4.93 per unit is now revised to ₹5.54 per unit.

The Commission referred to its seventh amendment to the Renewable Energy (RE) Regulations, which came into effect on December 6, 2019. According to this amendment, renewable energy generators who choose to operate under the Renewable Energy Certificate (REC) mechanism must sell their generated electricity to ESCOMs at the lower of two rates: the pooled cost of power purchase (APPC) for the state, or 75% of the generic tariff set by the Commission for the respective RE technology for that year.

For the financial year 2024-25, ESCOMs have already made payments to RE generators based on the earlier notified APPC of ₹4.93 per unit or 75% of the applicable generic tariff, whichever was lower. Now that the revised APPC is ₹5.54 per unit, any difference between the amount already paid and the newly applicable rate (still subject to the same rule of the lower of ₹5.54 or 75% of the generic tariff) will have to be adjusted. This adjustment will be settled by ESCOMs either receiving or paying the difference to the generators. The Commission has ordered that this amount should be paid or recovered in three equal installments, covering electricity supplied between April 1, 2024, and March 31, 2025.

Looking ahead to the financial year 2025-26, the Commission has also notified a provisional APPC of ₹5.54 per unit. This is being done as an interim measure until ESCOMs finalize the power purchase data for the year 2024-25. This provisional rate of ₹5.54 per unit will apply from April 1, 2025. Again, as per the regulations, ESCOMs will pay RE generators the lower of ₹5.54 per unit or 75% of the generic tariff fixed by the Commission for the relevant RE source in FY26. This too will be subject to a final truing up after actual data becomes available.

The KERC has adjusted the APPC for FY25 to ₹5.54 per unit based on actual figures and has provisionally fixed the same rate for FY26, with all payments to RE generators under the REC mechanism to follow the rule of choosing the lower of APPC or 75% of the generic tariff.