MPERC finalises FY2024-25 ARR true-up for MP's three DISCOMs and MPPMCL, and allows Rs. 3,307.07 Cr of decade-old deferred supplementary power purchase costs (FY2014-15 to FY2022-23) against a claim of Rs. 3,450.63 Cr
Petition seeking Truing-up of the Aggregate Revenue Requirement (ARR) for the Financial Year 2024-25 and approval of additional cost recovery of deferred supplementary power purchase cost of past period from FY 2014-15 to FY 2022-23; filed under Regulation 7.2 and Regulation 53.5 of the Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles for Fixation of Charges) Regulations, 2021, dated 3rd December 2021, including its amendments thereof and under Section 94 of the Electricity Act,
The three MP DISCOMs and MPPMCL jointly filed a petition seeking (a) true-up of their Aggregate Revenue Requirement for FY2024-25 based on audited actuals versus the approved Tariff Order, and (b) approval to recover Rs. 3,450.63 Crore of supplementary power purchase bills raised by generators for FY2014-15 to FY2022-23, which the Commission had earlier deferred pending further documentation in successive true-up orders. The filing was made under Regulations 7.2 and 53.5 of the MPERC MYT Regulations, 2021 and Section 94 of the Electricity Act, 2003. Public objections were invited (29 Dec 2025 notice; 25 Jan 2026 last date), a hybrid public hearing was held on 23 Feb 2026, and three stakeholders raised objections on supplementary bills, MPPMCL costs, power purchase practices, gain/loss sharing, capitalisation, open access revenue, surplus power, smart meter lease charges, unmetered sales, O&M, interest on loans/working capital and Return on Equity.
- Admitted supplementary power purchase cost of Rs. 3,307.07 Crore for FY2014-15 to FY2022-23 against the claimed Rs. 3,450.63 Crore, after prudence check
- Allocated the admitted supplementary cost as Rs. 907.25 Crore (East DISCOM), Rs. 1,231.87 Crore (West DISCOM) and Rs. 1,167.96 Crore (Central DISCOM)
- Rejected stakeholder objections that the supplementary bill claims were time-barred/final, holding that consideration of such claims had only been deferred, not rejected, in earlier True-up Orders
- Admitted power purchase cost, O&M expenses, Return on Equity, Depreciation, Interest on Project Loans/Working Capital, and other ARR heads for FY2024-25 strictly per the MYT Regulations, 2021 and audited accounts, without accepting DISCOMs' claimed figures at face value
- Admitted the sharing of gains/losses on account of AT&C loss variation as part of power purchase expenses, noting Central DISCOM has separately submitted its gain/loss-sharing methodology (10 Nov 2025) for the Commission's approval
- Directed that MPPMCL's ambiguous 'Other Costs' and 'Own Expenses' claims, and Central DISCOM's prior-period capitalisation claims, be examined through the prudence-check process detailed in the respective ARR chapters rather than accepted outright
- DISCOMs to continue pursuing separate Commission approval of the AT&C gain/loss-sharing methodology under Regulation 20.3 (Central DISCOM's submission of 10 Nov 2025 to be processed)
- Future supplementary power purchase bill claims must comply with the IT-based verification mechanism mandated under the SOP dated 25 Jan 2025 (Petition 120/2025 directions)
- MPPMCL/DISCOMs to provide plant-wise, transparent breakup of 'Other Costs' and 'Own Expenses' in subsequent filings instead of consolidated unexplained heads
- Prior-period capitalisation claims (e.g., Central DISCOM's Rs. 906.31 Cr) and consequential RoE/Depreciation/Interest impacts to be substantiated with documentary evidence in future true-ups/tariff filings
- DISCOMs to ensure clear, itemised disclosure of Open Access-related revenue (CSS, additional surcharge, wheeling charges) in future ARR/true-up petitions
- Lease agreements and payment/commissioning evidence for smart meters to be furnished for continued scrutiny in future filings
- • The Rs. 3,307 Crore legacy power purchase cost recovery, once passed through in future tariffs/surcharges, could raise the effective cost of grid-supplied power for C&I consumers, strengthening the economics of open access and captive RE
- • Continued lack of granular disclosure on Open Access revenue (CSS/additional surcharge) flagged by stakeholders signals scope for C&I open-access users to scrutinise and contest surcharge computations in future proceedings
- • Approval of smart meter lease charges (~Rs. 197 Cr) subject to documentary verification indicates distribution cost components relevant to smart-metered C&I consumers will keep rising, reinforcing the case for demand-side/storage optimisation
- • The precedent of admitting decade-old deferred power purchase costs suggests DISCOMs may continue to bring retrospective true-up burdens onto tariffs, creating unpredictability for C&I consumers relying solely on discom supply
This order is significant less for the FY24-25 true-up mechanics (numbers largely deferred to internal chapters) and more for validating a ten-year-old, Rs. 3,307 Cr retrospective power-purchase cost recovery despite strong stakeholder pushback on finality and lack of fresh evidence. For C&I buyers, this confirms MP DISCOMs' tariffs remain exposed to legacy cost pass-throughs, reinforcing the value of locking in open-access RE/storage PPAs now rather than waiting for surcharge relief. Expect continued disputes on gain/loss-sharing methodology and OA revenue transparency in the next tariff order.
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.