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Punjab State Electricity Regulatory Rejects PSPCL’s Rs3.10/kWh Fixed Tariff Proposal, Mandates Competitive Bidding for 1,000 MW Solar Procurement

The Punjab State Electricity Regulatory Commission (PSERC) has denied the Punjab State Power Corporation Ltd (PSPCL)’s request to fix a generic levelized tariff of Rs3.10/kWh for procuring 1,000 MW of solar power from 1 MW to 5 MW projects. Instead, PSERC instructed PSPCL to conduct a transparent reverse auction process, using Rs3.10/kWh as a ceiling tariff.

This decision aligns with the Commission’s earlier rulings, which shifted tariff discovery for solar projects from generic tariff determination to competitive bidding, citing improved market maturity and lower tariffs through reverse auctions. PSPCL had sought the fixed tariff citing escalating renewable purchase obligation (RPO) targets, an expected shortfall of over 42,000 million units by FY 2030, and potential penalties of Rs3.72/kWh for DRE non-compliance.

PSPCL argued that sourcing power from smaller, local solar projects would reduce ISTS charges and transmission losses while promoting local development. It proposed an FCFS allocation via a web portal, which the Commission rejected due to transparency concerns.

PSERC reaffirmed its commitment to competitive bidding, stating it ensures regulatory compliance, fairness, and better price discovery. PSPCL has now been directed to initiate the bidding process and submit the discovered tariff for final approval. In a related development, the Commission has also approved an additional surcharge on open access consumers—Rs1.22/kWh for full open access and Rs0.83/kWh for partial access—to recover stranded costs.