GERC Allows PGVCL To Withdraw PM-KUSUM Solar Tariff Petition After MNRE Allocation Cuts In Gujarat

The Gujarat Electricity Regulatory Commission (GERC) has allowed Paschim Gujarat Vij Company Limited (PGVCL) to withdraw its petition seeking approval of solar power tariffs under Component-A of the central government’s PM-KUSUM scheme. With this decision, the Commission has brought an end to the tariff approval process after the utility informed it that the proposed power procurement could no longer be implemented because of changes made by the Ministry of New and Renewable Energy (MNRE).

The order, issued on July 8, 2026, by a bench comprising Chairman Pankaj Joshi and Member Hiren Shah, accepted PGVCL’s request for unconditional withdrawal of Petition No. 2601 of 2026. The Commission observed that the petition had become infructuous as the procurement process could not move forward under the existing policy framework.

PGVCL had originally approached GERC for the adoption of a tariff discovered through a competitive reverse bidding process conducted under the PM-KUSUM Component-A scheme. The utility had proposed a ceiling tariff of ₹2.95 per unit for purchasing electricity from decentralized ground-mounted and stilt-mounted grid-connected solar power plants. It had also sought approval to issue Letters of Award (LoAs) and sign Power Purchase Agreements (PPAs) with the successful bidders selected through the tender.

However, during the proceedings, PGVCL informed the Commission that significant policy changes by MNRE had made the project unviable. According to the utility, Gujarat’s capacity allocation under Component-A was gradually reduced from the initially approved 500 MW to 300 MW and later to only 175 MW. As a result, PGVCL’s own allocation was sharply cut from 307 MW to just 58.50 MW.

PGVCL further stated that Gujarat Urja Vikas Nigam Limited (GUVNL) had requested MNRE to increase the state’s allocation to 230 MW and allow the execution of fresh PPAs. However, the ministry rejected the request. In a communication issued in April 2026, MNRE clarified that the deadline for signing PPAs under Component-A had already expired on December 31, 2025, and no new agreements could be approved. The ministry also informed the state that no additional allocations would be made under the existing framework as a new scheme was under development. Instead, states were advised to focus on implementing their already allocated capacities.

Because the available allocation had already been fully utilized and no central Performance Based Incentive (PBI) would be available for additional projects, PGVCL informed GERC that the tariff discovered through the bidding process could no longer be implemented. The company also confirmed that it had not issued any Letters of Award to the selected bidders before seeking withdrawal of the petition.

The utility also informed the Commission that it had collected application processing fees and Earnest Money Deposits (EMDs) from participating bidders. Although PGVCL stated that its own expenses on the bidding process exceeded the application fees collected, it proposed to refund both the EMDs and application fees in full since the cancellation resulted from policy changes beyond the control of the bidders.

GERC, however, clarified that the issue of refunding fees did not fall within the scope of the present petition. The Commission therefore did not pass any order on the matter and left it to PGVCL to take an appropriate administrative decision regarding refunds. With the withdrawal of the petition, the tariff approval process under this PM-KUSUM procurement has officially come to a close.