MERC Makes Exception to Fresh Bidding Norm, Clears Extra 500 MW Storage for MSEDCL

The Maharashtra Electricity Regulatory Commission (MERC) in its latest order has approved a proposal by Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). As per the order, the state power discom can procure an additional 500 MW of pumped hydro storage (PSP) capacity from Torrent Power Ltd.

The state power regulator approved the plan and allowed MSEDCL to contract this capacity at the tariff already adopted by the Commission. Torrent Power had earlier won 1,500 MW under MSEDCL’s competitive bidding process, and with this approval, its total allocation rises to 2,000 MW.

The commission, meanwhile, took an exception in this case, citing reasonable tariffs. In granting the latest approval, MERC said that while fresh bidding is generally required for additional capacity, it made an exception given the competitive tariff and the state’s growing need for storage. The Commission underlined that: Torrent Power’s tariff remains attractive.

Why Is Exception Considered? 

"The Commission recognizes that the tariff offered by M/s. Torrent Power Ltd. is attractive 
and competitive. Considering large-scale solar power procurement planned under MSKVY 
and MSKVY 2.0, it is paramount to have sizable storage capacity. Hence, as an exceptional 
case the Commission finds it appropriate to accord approval to additional 500 MW 
capacity/power procurement at same discovered tariff, which is adopted earlier vide Order 
dated 26 September 2024. This shall not be considered as a precedence for any future power 
procurement," the MERC order said. 

MERC, however, cautioned that the approval “shall not be treated as a precedent for future procurement. 

Case Details

MSEDCL had approached MERC on 23 October 2024 seeking approval for the additional capacity. The utility’s original tender, issued on 9 March 2024, was for 2,000 MW of intra-state connected PSP projects, with a 1,000 MW green-shoe option. The Commission subsequently expanded the permissible capacity to 4,000 MW through clarificatory orders in July 2024.

Following the bidding process, 3,000 MW was awarded—1,500 MW each to JSW Neo Energy and Torrent Power—at tariffs that MERC termed “reasonable and reflective of the current market situation.” Torrent Power’s tariff was fixed at an annual cost of ₹83,98,400 per MW, with a cycle loss of 25%.

With this approval, MSEDCL’s contracted pumped storage capacity rises to 3,500 MW. The utility must now submit signed copies of the Energy Storage Facility Agreements (ESFAs) to the Commission.