The Central Electricity Regulatory Commission has issued its order in the petition, clearing the way for the adoption of a tariff for 420 MW of Round-the-Clock renewable power to be supplied from ISTS-connected renewable energy projects. The petition was filed by the Solar Energy Corporation of India under Section 63 of the Electricity Act, 2003. This section allows tariff adoption after a transparent, competitive bidding process. The tender in question was carried out under the SECI-RTC-IV scheme, which follows the guidelines announced by the Ministry of Power on June 9, 2023. The order was issued on November 22, 2025, and the Coram included Shri Ramesh Babu V., Shri Harish Dudani, and Shri Ravinder Singh Dhillon.
The case mainly dealt with how the trading margin should be applied for the sale of renewable energy under this scheme. The trading margin is a charge that a trading licensee may levy when handling the sale and purchase of electricity. The Commission referred to the CERC Terms and Conditions of Trading License Regulations, 2020, which clearly lay out how the trading margin should be managed, including the conditions under which it can be charged or must not be charged.
Regulation 8(1)(d) states that for long-term or medium-term power purchase agreements, no trading margin shall be charged if the trading licensee provides either an escrow arrangement or an irrevocable, unconditional, and revolving letter of credit to the seller. These financial instruments act as security for the renewable energy generators, ensuring that payments are guaranteed. If such security measures are not provided, then the trading licensee can charge a trading margin, but only up to a ceiling of two paise per kWh. A similar rule is explained under Regulation 8(1)(f), which applies to transactions under Back-to-Back contracts.
The Commission observed that the Power Sale Agreements that SECI will sign with distribution companies have not yet been finalized. These agreements will later determine the trading margin applicable between SECI and the buying distribution licensees. However, the Commission has provided clear guidance for the present stage. It ruled that if SECI does not provide either an escrow arrangement or a revolving and unconditional letter of credit to the renewable power generators, then the trading margin must not exceed the ceiling of Rs. 0.02 per kWh as laid out in the regulations.
This condition is important because it ensures that renewable power generators are financially protected and that the trading margin remains fair and within the regulatory limits. The Commission clarified that the trading margin will ultimately depend on the final Power Sale Agreements, but until those are executed, the ceiling will apply wherever SECI fails to provide the required security.
With this clarification, the Commission has disposed of Petition No. 722/AT/2025. The order brings clarity to the tariff adoption process for the 420 MW RTC renewable energy scheme and provides a clear framework for how the trading margin will be treated based on the presence or absence of financial security measures for the generators.
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