Uttar Pradesh Electricity Regulatory Commission Upholds Existing Tariff In NPCL-GNIDA Solar Power Dispute

The Uttar Pradesh Electricity Regulatory Commission has given its decision on a petition filed by Noida Power Company Limited regarding its power purchase agreement with the Greater Noida Industrial Development Authority. The case revolved around a 1 MWp solar power plant that has been operating since March 1, 2015, under a PPA signed between the two parties. NPCL had requested an extension of the agreement for another 10 years, but wanted the tariff to be lowered from the existing rate.

The company argued that the solar market has changed considerably since the agreement was first signed, with costs reducing over the years. It also pointed out that the solar plant has not performed as expected. The capacity utilization factor has been around 12 percent, much lower than the 20% projected at the time of installation. NPCL stated that it should not be forced to bear the financial burden of a poorly performing plant and therefore sought a new arrangement with a reduced tariff.

GNIDA, on the other hand, strongly opposed the proposal for lowering the tariff. It argued that the current tariff of ₹7.06 per unit should continue. The authority explained that it had invested ₹1278.50 lakh in setting up the solar project, but the revenue earned so far has only been about half of this cost. Any reduction in tariff, it argued, would severely affect its ability to recover the investment. GNIDA also highlighted that lowering tariffs midway could discourage similar renewable energy investments in the future, as investors look for stability and security in financial returns.

The matter was heard by the Commission on August 19, 2025, after which the order was issued. The Commission acknowledged that the underperformance of the solar plant was indeed the responsibility of GNIDA and not of NPCL. However, the Commission also considered the financial aspect, noting that GNIDA had not yet recovered its full project cost. After weighing both sides, the Commission ruled that the existing tariff of ₹7.06 per unit would continue.

The order specifies that this tariff will remain in force until the end of the financial year 2028-29. Once this period ends, the tariff for the remaining years of the extended PPA will be fixed based on the weighted average tariff of similar solar projects procured through competitive bidding. With this decision, the Commission disposed of the petition, thereby providing clarity on the future of the agreement.

This ruling balances the interests of both sides. While it acknowledges the challenges faced by NPCL due to the plant’s low output, it also ensures that GNIDA has the chance to recover its investment before any tariff adjustments are made. The order is also likely to set a precedent for how underperforming renewable energy projects are handled in similar regulatory cases in the state.