PSERC Dismisses PSPCL’s Review Petition On 1450 MW Solar Power Procurement In Punjab

The Punjab State Electricity Regulatory Commission has issued its final order on Review Petition No. 01 of 2025 filed by the Punjab State Power Corporation Limited. The petition was filed to seek modification of the Commission’s earlier order of November 4, 2024, where approval was denied for the procurement of 1,450 MW of solar power from SJVN Limited under the competitive bidding process. PSPCL had argued that the tariffs of ₹2.52 per unit for 1150 MW and ₹2.53 per unit for 300 MW, plus a trading margin of 7 paise per unit, were among the lowest discovered through various tenders. They contended that power costs cannot be compared across different periods because market conditions, module prices, and capital costs keep fluctuating. They also argued that the Commission’s earlier conclusion regarding higher landed costs and additional financial burden on consumers was not fully justified.

The petitioner also highlighted that the rising demand in Punjab, land constraints within the state, and the failure of intra-state tenders made it necessary to procure power through ISTS-connected projects implemented by central agencies. PSPCL claimed that without such tie-ups, the state would have to rely more on costly short-term power purchases, especially during the paddy season. They further pointed out that even though the trading margin of ₹0.07/kWh would amount to a large figure over 25 years, it is permitted under the CERC regulations and is meant to compensate SJVN for its role as an intermediary procurer managing risks and contractual obligations.

SJVN, in its response, supported PSPCL’s case and emphasized that the tariffs had already been adopted by CERC as part of a transparent competitive bidding process. It stressed that disallowing the power procurement at this stage would have far-reaching adverse implications, as PPAs with developers had already been signed. They reiterated that the trading margin was mutually agreed upon, well within the regulatory cap, and widely accepted in other projects. SJVN also argued that failure to approve the arrangement would make it difficult to find an alternate procurer under similar terms, thereby endangering the viability of the projects.

During proceedings, it emerged that one of the developers, GRT Jewellers, terminated its PPA citing delays and loss of viability, while another developer, Furies Solren, invoked force majeure and sought alternative arrangements. Others, too, expressed concerns about financial closure and connectivity timelines. These developments raised questions about the stability of the procurement cost originally submitted.

The Commission observed that despite repeated directions, PSPCL and SJVN could not confirm that the final parameters, like tariff and landed costs, would remain the same as earlier. Instead, estimates showed that the landed cost would now be about ₹3.00/kWh for 300 MW expected to be commissioned by 2027, and around ₹3.29–3.30/kWh for 1000 MW expected to be commissioned by 2030. This was significantly higher than the original figures and lacked firm commitments.

The Commission concluded that PSPCL’s grounds for review, such as subsequent discovery of a tariff in another tender, did not constitute new evidence relevant to the earlier decision. It also held that arguments about errors in the original order were not self-evident mistakes but matters requiring reasoning, which are not grounds for review but rather for appeal. The Commission emphasized that intermediaries like SJVN were being paid trading margins without bearing responsibility for delays, and that PSPCL itself could have directly floated tenders for renewable projects.

In light of these findings, the Commission ruled that no sufficient grounds existed for reviewing its earlier order and therefore dismissed the review petition on September 1, 2025.