Maharashtra: MERC Flags ₹40,000 Crore Power Tender Irregularities By MSEDCL

Maharashtra: MERC Flags ₹40,000 Crore Power Tender Irregularities By MSEDCL

In a scathing order against the MSEDCL last week, the MERC, as an adjudicating authority on power tariffs, sought justification from the state power distributor for not approaching it before starting bidding for the mega tender to procure 1,600MW of coal-based thermal power and 5,000MW solar power for Maharashtra from private players.

Dharmesh ThakkarUpdated: Tuesday, July 02, 2024, 11:37 AM IST
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Mumbai: The Maharashtra Electricity Regulatory Commission (MERC), the body regulating electricity tariffs and power procurement in the state, has found discrepancies in a power tender worth around Rs 40,000 crore issued by the Maharashtra State Electricity Distribution Company Ltd.

In a scathing order against the MSEDCL last week, the MERC, as an adjudicating authority on power tariffs, sought justification from the state power distributor for not approaching it before starting bidding for the mega tender to procure 1,600MW of coal-based thermal power and 5,000MW solar power for Maharashtra from private players. The MSEDCL had approached the commission for an urgent hearing, to seek approval for ‘deviations in standard bidding documents’ for long-term procurement of power.

A Senior MERC Official On The Discrepancies

According to senior MERC officials, scrutiny had revealed several discrepancies, including lack of prior regulatory approval, full tender to a single bidder, no part-capacity bidding allowed as per TBCB guidelines, deviation in bidding sought after issuing tender, rules on weighted average tariffs not being followed and had raised significant concerns on fairness and the encouragement of competition in the bidding process for power projects.

The Tariff-Based Competitive Bidding (TBCB) Guidelines and National Tariff Policy (NTP) explicitly mandate the promotion of competition and efficient resource utilisation and underscore the importance of transparency and competition.

‘‘MSEDCL submitted only a Powerpoint presentation on the project along with its petition and prayers and the commission asked it to submit the complete Central Electricity Authority Report on the Resource Adequacy Study of MSEDCL on mega power procurement contract,” a MERC official observed and added that “the tender for meeting Maharashtra’s power demand for financial year 2033-’34 was launched in a hurry in March 2024, before the model code of conduct for the general elections came into effect. It was done without fulfilling the basic requirements of obtaining MERC approvals.”

MERC Seeks Explanation From MSEDCL

The MERC has sought an explanation from the MSEDCL for the rationale behind considering the combined power procurement of solar and thermal through a single entity and clarifying whether all future thermal power procurement would be on the same principle. It has demanded that the MSEDCL submit a transmission capacity addition and strengthening plan to coincide with the proposed power procurement process.

The electricity regulator order has stated in the hearing that during solar hours, the thermal unit will run on a technical minimum and will be subsequently ramped up during non-solar hours.

“The proposed power procurement is not location-specific and hence, the possibility of setting up of projects outside Maharashtra cannot be ruled out,” notes the MERC order.

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