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Punjab Regulator Approves Full ISTS Waiver for NHPC Solar Projects Delayed to 2026

The Punjab State Electricity Regulatory Commission (PSERC) has approved the continuation of power procurement by the Punjab State Power Corporation Limited (PSPCL) from NHPC’s 300 MW solar project at Bikaner, Rajasthan, and 100 MW project at Khavda, Gujarat, even if part of the capacity is commissioned after June 30, 2025.

The Commission ruled that these projects will remain eligible for a full waiver of interstate transmission system (ISTS) charges, provided they achieve commissioning before June 30, 2026.

Background

PSERC’s earlier approval had limited the ISTS waiver to projects commissioned by June 30, 2025, as per PSPCL’s 400 MW power purchase agreement (PPA) with NHPC at a ceiling tariff of Rs 2.45 (~$0.027)/kWh. Under this deal, NHPC was to deliver 300 MW from Bikaner and 100 MW from Khavda, originally scheduled for completion by April 2024.

Due to delays in the supply of domestically manufactured solar modules, the Indian Renewable Energy Development Agency (IREDA) granted multiple deadline extensions — first to September 2024, then March 2025 and December 2025 for the Bikaner project, and up to March 2026 for the Khavda plant.

NHPC began phased commissioning of the Bikaner project, bringing 107.14 MW online in April 2025 and 53.57 MW in June 2025, with additional capacity expected through September 2025.

PSPCL argued that even with a 25% ISTS charge, the effective tariff would rise only to Rs 2.70 (~$0.03)/kWh, still below prevailing market prices of around Rs 3 (~$0.034)/kWh. The utility emphasized that continued procurement was necessary to meet renewable purchase obligations (RPOs) and maintain cost efficiency.

Both PSPCL and NHPC cited the Central Electricity Regulatory Commission (CERC)’s latest amendment, which extends full ISTS charge waivers for renewable projects with approved time extensions up to June 30, 2026.

IREDA confirmed that it had formally approved the extensions, valid up to December 31, 2025, for Bikaner and March 2, 2026, for Khavda, with the concurrence of the Ministry of New and Renewable Energy (MNRE).

Commission’s Findings

In its analysis, PSERC noted that NHPC had already commissioned 214.28 MW from Bikaner and was awaiting clearance for the remaining 85.72 MW. Correspondence from NHPC to CERC clarified that the fourth amendment to Regulation 13(2)(h) explicitly allows renewable projects with valid extensions until June 30, 2026, to retain full ISTS charge waivers.

PSERC found no ambiguity in this interpretation and ruled that both NHPC projects qualify for the exemption. It also observed that the landed cost of power remains unchanged from the 2023 approval and continues to be economically viable for Punjab’s consumers.

Accordingly, the Commission authorized PSPCL to procure the remaining capacity from NHPC’s Bikaner and Khavda solar projects, confirming their eligibility for a 100% ISTS charge waiver if commissioned before June 30, 2026.