MERC adopts Section 63 tariff of ₹5.98/kWh for 500 MW medium-term RTC power procurement by AEML-D; rejects additional 300 MW green-shoe quantum
Case of Adani Electricity Mumbai Limited – Distribution seeking adoption of tariff for procurement of 800 MW Round the Clock power on Medium-term basis for the period starting from 01 September 2022 to 14 October 2024 through Tariff Based Competitive Bidding Guidelines issued by the Ministry of Power , Government of India And Interlocutory Application filed by Adani Electricity Mumbai Limited – Distribution seeking urgent and early hearing of the captioned matter.
AEML-D sought MERC adoption of tariff for 800 MW Round-the-Clock (RTC) medium-term power (1 Sep 2022–14 Oct 2024) discovered via DEEP portal competitive bidding under Section 63, to replace its high short-term power dependency (30-50% of purchases) as directed in MERC's MYT Order (Case 325/2019) and FAC approval, amid rising imported coal prices, DAM demand-supply gaps, and termination of the VIPL long-term PPA.
- Approved adoption of tariff of ₹5.98/kWh for 500 MW medium-term RTC power (300 MW from AEL-REL + 200 MW from AEL-REGL) for 1 Sep 2022 to 14 Oct 2024 under Section 63
- Rejected the additional 300 MW 'green shoe option' capacity from AEL-REGL as it was not part of the original floated bid of 500 MW, to preserve bidding sanctity
- Held that the discovered tariff of ₹5.98/kWh is market-reflective, comparing favourably with DAM weighted average (~₹5.68/unit), short-term DEEP rates (₹5.83-₹10/unit), and Haryana's medium-term tender (₹5.70-5.75/unit)
- Accepted AEML-D's rationale that medium-term procurement replaces short-term quantum already approved (3335 MU FY23, 3552 MU FY24) rather than adding new procurement
- Noted no separate STU transmission permission required as this substitutes existing short-term flows
- Case No.149 of 2022 and IA No.15 of 2022 partly allowed
- AEML-D to execute PPAs with AEL-REL (300 MW) and AEL-REGL (200 MW) per LOA terms for the approved 500 MW only
- Surplus/unutilized capacity beyond approved 500 MW (i.e., the rejected 300 MW) cannot be billed to consumers under this order; AEML-D may explore separate approval route if needed
- Medium-term power to substitute short-term procurement quantum already approved in MYT Order (3335 MU FY23, 3552 MU FY24), not be treated as incremental purchase
- AEML-D to continue efforts to optimize ADTPS costs and channel any surplus power through short-term bidding/exchanges
- No separate STU transmission permission required since this replaces existing short-term power flows
- • C&I consumers of AEML-D benefit from a fixed ₹5.98/kWh medium-term rate for 500 MW, reducing exposure to volatile short-term/exchange prices (which ranged ₹5.83-₹10/unit or higher)
- • Precedent reinforces MERC's push for distribution licensees to cap short-term dependency at 10-12%, signalling more medium/long-term RE and thermal PPAs likely ahead — relevant for generators/developers bidding into DISCOM tenders
- • Bidders and DISCOMs must strictly adhere to floated bid quantum; green-shoe/optional capacity additions post-bid will not be approved by MERC, a caution for structuring future bid documents
- • Open-access/short-term market participants should note MERC's observation that ~2000 MW tied up in medium-term tenders across licensees could tighten short-term market supply and firm up exchange prices
This order is a useful benchmark (₹5.98/kWh RTC, coal-based, Maharashtra periphery) for any medium-term thermal PPA bid evaluation in Maharashtra, and confirms MERC's strict scrutiny of bid-document scope — green-shoe/optional quantities not explicitly tendered will not survive adoption. Developers structuring DEEP-portal bids for DISCOMs should build any optionality (green-shoe, capacity flexibility) explicitly into the bid document, not add post-facto. For C&I buyers, the case also signals continuing DISCOM appetite to reduce short-term/exchange dependency, which could tighten short-term liquidity and firm up prices, reinforcing the case for locking in medium/long-term OA or captive RE-plus-storage arrangements now.
Growthifye does not take responsibility for the accuracy of this information. Values are compiled from tariff orders published on the websites of State Electricity Regulatory Commissions and distribution licensees (plus CEA / MoP / Grid-India), parsed automatically and shown with their source. Always verify against the signed order before any commercial decision. This one-pager is a Vidura-assisted summary of the official order; the signed order prevails.