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Maharashtra cogen units in trouble after regulatory body rules in favour of electricity board

  • The power woes of Maharashtra’s sugar sector continue after the Maharashtra Electricity Regulatory Commission (MERC) ruled in favour of the Maharashtra State Electricity Distribution Company which has fixed an entry level tariff of Rs 4 per unit in the tendering process for cogen units. Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) and the Cogeneration Association of India have expressed reservations on the ruling and now plan to approach chief minister Devendra Fadnavis to resolve the issue of power purchase agreements (PPAs) of cogen units. Senior officials of the Federation pointed out that the Maharashtra Electricity Regulatory Commission ( MERC) had earlier approved a tariff of Rs 6.33 per unit for cogenerated power for the 2017-18 period and therefore should reconsider this as the entry level tariff for the current season. According to officials, MSEDCL had fixed Rs 4 per unit as the entry level tarrif for purchase of 100 MW in a phased manner from cogen units in the state and has also recommended irreversible bidding which could lower the power purchase costs. “As per the terms and conditions for the bidding process, the EMD (Earnest Money Deposit was fixed at Rs 10 per MW and a Performance Guarantee of Rs 20 lakh per MW was decided by MSEDCL. Clearance certificates were required from Maharashtra Energy Development Agency (MEDA) and copies of the crushing licenses as well,” an official said. The Sugar sector had opposed the petition on the grounds that when there were no PPAs in place and at an entry level tariff of Rs 4 per unit, the economics of the cogen sector would be affected in a negative manner.

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