UPERC approves Rs 2.57/kWh tariff for 300 MW solar power from MBPL

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved a Power Purchase Agreement (PPA) between Uttar Pradesh Power Corporation Limited (UPPCL) and MB Power (Madhya Pradesh) Limited (MBPL) for procurement of 300 MW of solar photovoltaic (PV) power at Rs 2.57 per kWh for 25 years.

The PPA, dated July 16, 2025, was approved in Petition No. 2273 of 2025. The order was issued by a bench comprising Chairman Arvind Kumar, Member Sanjay Kumar Singh and Member (Law) Griesh Kumar Vaish.

The procurement was undertaken through a tariff-based competitive bidding (TBCB) process initiated by UPPCL for 2,000 MW of solar power under guidelines issued by the Ministry of Power.

Tariff discovery

UPPCL issued Request for Selection (RfS) No. 01/PPA/RE/Solar/2000MW/2024 on February 8, 2024. UPERC approved the bidding documents on August 13, 2024, and 10 bidders participated in the process.

An e-Reverse Auction was conducted on January 3, 2025, following which Fastnote Biofuels Private Limited (FBPL) was selected for 300 MW at a discovered tariff of Rs 2.57 per kWh. UPPCL issued the Letter of Award (LoA) on March 26, 2025.

FBPL subsequently sought a change in the project location from Madhya Pradesh to Uttar Pradesh. UPPCL permitted the change through an amended LoA dated April 15, 2025.

Merger

FBPL, a wholly owned subsidiary of Hindustan Thermal Projects Limited (HTPL), proposed a merger with MBPL, another HTPL subsidiary that operates a 1,250 MW thermal power plant in Anuppur district, Madhya Pradesh. Both companies are part of the Hindustan Power Group.

The merger was undertaken through the fast-track process under Section 233 of the Companies Act, 2013, following amendments introduced by the Ministry of Corporate Affairs on September 4, 2025. The Regional Director, North-Western Region, Ahmedabad, approved the amalgamation of FBPL with MBPL through an order dated June 22, 2026.

UPPCL had provided its consent for the merger on June 27, 2025, subject to conditions including no financial implications for UPPCL, maintenance of minimum 51% shareholding until one year after the Scheduled Commercial Supply Date (SCSD), and payment of applicable document and bid processing fees.

Commission’s findings

UPERC noted that the merger approval was completed only on June 22, 2026, after the PPA had been signed on July 16, 2025. The Commission clarified that any investment made in the project before PPA approval and tariff adoption would be at the risk and cost of the project developer.

It also held that MBPL would not be entitled to claim any tariff impact arising from a delay in achieving the Scheduled Commercial Operation Date (SCOD), as the delay in PPA approval was attributable to the incomplete merger process.

The Commission expressed displeasure with UPPCL over what it termed a casual approach and delays in filing submissions. It directed UPPCL to ensure that future affidavits are signed by the Managing Director or Director and clearly identify every deviation between finalised bidding documents and the versions approved by the Commission.

Tariff adoption

UPERC found that the bidding process complied with the Ministry of Power’s guidelines and the bidding documents approved by the Commission. It therefore adopted the discovered tariff of Rs 2.57 per unit under Section 63 of the Electricity Act, 2003.

The Commission approved the July 16, 2025 PPA for procurement of 300 MW of solar PV power at a Capacity Utilisation Factor (CUF) of 26.65%. The tariff will remain fixed for the full 25-year term of the agreement.

UPERC noted that the procurement will help UPPCL meet its Renewable Purchase Obligation (RPO) targets, which are required to reach 43.33% by FY 2029-30. Non-compliance can attract penalties of up to Rs 10 lakh per failure under the Energy Conservation Act, along with an additional Rs 3.72 per unit for each unit of shortfall.

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