RERC Rejects PM-KUSUM Petition To Reduce Solar CUF From 20% To 17% For Solar Projects

The Rajasthan Electricity Regulatory Commission (RERC) has dismissed a review petition filed by M/s Kishan Urja Hitkari Samiti, an association representing renewable power generators under Component-A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme. The petition sought a revision of the levelised tariff determined under the Commission’s February 2020 order by reducing the Capacity Utilisation Factor (CUF) from 20% to 17%, in line with a subsequent regulatory order issued in October 2024 for a different phase of the scheme.

The petitioner argued that achieving a 20% CUF was difficult for solar power projects connected to rural 11 kV feeders. According to the association, grid instability, load shedding and local operating conditions affected the ability of these projects to achieve the prescribed generation levels. It maintained that generators operating under Phase-I and Phase-II of the PM-KUSUM scheme should be subject to the same CUF requirements rather than different standards.

The association also argued that solar power generation depends on the installed direct current (DC) capacity of the modules rather than the contracted alternating current (AC) capacity. It sought a review of the earlier tariff order, stating that the existing CUF requirement did not adequately reflect the operational challenges faced by generators in rural areas.

Rajasthan Urja Vikas & IT Services Ltd (RUVITL), the respondent in the matter, opposed the petition. It submitted that the review application was barred by limitation and that power purchase agreements (PPAs) already concluded for a period of 25 years could not be reopened because of regulatory changes introduced for subsequent phases of the scheme.

RUVITL also highlighted the difference in the ceiling tariffs applicable to the two phases. According to the respondent, Phase-I projects benefited from a higher ceiling tariff of ₹3.14 per unit, compared with ₹3.04 per unit for Phase-II. It argued that the petitioner could not selectively adopt a favourable parameter from a later regulatory order while retaining the benefits available under the earlier framework.

After examining the submissions and operational records, RERC concluded that the subsequent order relating to a different phase of the scheme did not constitute the discovery of new evidence required to review the earlier decision under Section 94(1)(f) of the Electricity Act, 2003. The Commission held that the regulatory change cited by the petitioner was insufficient to reopen the concluded tariff determination.

The Commission also considered generation data from rural substations, which showed that several Phase-I solar power plants had achieved annual CUFs exceeding 19% to 20%. These records did not support the argument that achieving the prescribed CUF was generally impractical for projects operating under the earlier phase.

RERC further clarified that commercial accounting and performance benchmarks must be assessed against the contracted AC capacity at the point of interconnection. It therefore rejected the petitioner’s argument that installed DC module capacity should determine normative tariff calculations.

Consequently, the Commission dismissed the review petition, finding that no sufficient grounds had been established to reconsider the February 2020 tariff order. The decision leaves the existing tariff framework and contractual arrangements for the concerned Phase-I projects unchanged.