Maharashtra Electricity Regulatory Commission (MERC) has directed Maharashtra Airport Development Corporation (MADC) to undertake fresh bidding for its power procurement programme.
In a very recent order, MERC has directed MADC to go in for re-bidding for its power procurement plan, within six months.
Here is a summary of key developments:
- MADC is a deemed distribution licensee for the MIHAN SEZ area at Nagpur in Maharashtra. Currently, MADC has three HT consumers on 33kV, 16 HT consumers at 11kV and 52 LT consumers.
- The existing short-term power procurement contract that MADC had with Maharashtra State Electricity Distribution Company Ltd (MESDCL), expired on February 28, 2021.
- MADC invited bids for power procurement of around 16 mw for the period March 1, 2021 to February 28, 2025. Only one supplier, namely MSEDCL, responded. Accordingly, MADC finalized the power procurement with MSEDCL a tariff of Rs.5.25 per kwh. This was much higher than the tariff paid under the short-term contract that expired on February 28, 2021.
- In its detailed order, MERC brought to light several lapses on the part of MADC. These included delay in initializing and finalizing the new power procurement programme. MERC also highlighted that the tariff of Rs.5.25 per kwh was clearly on the higher side, and “non-reflective” of market price. It may be noted that MADC did try to renegotiate the tariff, through the reverse bidding process, but MSEDCL was not inclined to bring down the Rs.5.25 per kwh originally quoted.
- However, as the primary objective was to ensure that MIHAN SEZ consumers receive uninterrupted power supply, MERC provisionally agreed to the power procurement programme.
- Further, MERC ordered MADC to undertake re-bidding of its power requirement, complete the procedure and file the petition for adoption of tariff within six months from the date of the order. The MERC order is dated May 3, 2021.
- MERC also ruled that the power purchase cost (of Rs.5.25 per kwh) may NOT be allowed to be passed on to the consumers, as it is.
- MERC will take an appropriate view on the matter based on the new rate discovered in the re-bidding process. Accordingly, MERC may not allow certain power purchase expenses during the Multi-Year Tariff (MYT) Order, the state regulator ruled.
(Featured photograph shows the Central Facility Building of the MIHAN SEZ in Nagpur, Maharashtra.)
