en.Wedoany.com Reported - The Maharashtra Electricity Regulatory Commission (MERC) has approved key amendments to power purchase agreements (PPAs) signed between Maharashtra State Electricity Distribution Company Limited (MSEDCL) and solar developers. These agreements involve delayed projects with a total capacity of 9,154 MW under the Mukhyamantri Saur Krishi Vahini Yojana 2.0 (MSKVY 2.0). According to the commission's order issued on June 3, MSEDCL is permitted to adjust project commissioning timelines and introduce a sunset date mechanism, but the regulator rejected the utility's proposal to reduce tariffs for projects commissioned after the revised deadline. These PPAs cover 204 solar project developers selected through a competitive bidding process, which was approved by the regulator in March 2024.
Before the case was submitted to MERC, several developers had reported implementation challenges, land-related issues, and other obstacles causing project execution delays to MSEDCL. Subsequently, MSEDCL sought regulatory approval to amend the existing PPAs after the Ministry of New and Renewable Energy (MNRE) decided to extend project commissioning timelines to qualify under the Central Financial Assistance (CFA) framework. Under the approved amendments, the scheduled commercial operation date (SCOD) for projects has been extended to March 31, 2026. The commission also approved the introduction of a sunset date of December 31, 2026, allowing developers additional time beyond the revised SCOD to complete projects, subject to MSEDCL approval and specific conditions. MERC noted that without the proposed amendments, projects failing to commission within the original contractual timeline would be automatically terminated, leading to forfeiture of performance guarantees. The order stated that the proposed amendments would provide project developers an opportunity to complete uncommissioned capacity rather than face termination.
The regulator clearly distinguished between project commissioning timelines and the MNRE's extension of CFA eligibility periods. While acknowledging that the central government has extended the deadline for availing CFA benefits to March 31, 2027, MERC held that such extensions do not automatically alter contractual obligations under the PPAs. The commission also rejected MSEDCL's proposal to reduce tariffs for projects commissioned after March 31, 2026. MSEDCL had argued that delayed projects should be compensated at rates more aligned with recent market prices to balance consumer interests. Developers opposed the proposal, contending that modifying tariffs after the competitive bidding process would undermine project economics and violate the original bidding framework. MERC agreed with the developers, ruling that tariff adjustments were not part of the original tender documents and could not be introduced retroactively. The commission stated that since this affects tariffs, changing the discovered tariff after the bidding process may be inappropriate.
The order is expected to provide relief for hundreds of megawatts of delayed solar capacity under MSKVY 2.0, one of Maharashtra's flagship feeder solarization programs aimed at providing daytime power to agricultural consumers. The regulator also warned that this approval should not be considered a precedent for future tender-based renewable energy procurement, with the approval granted considering the importance of the MSKVY 2.0 program and the need to balance the interests of developers, consumers, and the state.
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