The 6,600 MW power supply tender of the Maharashtra power utility is subject to regulatory scrutiny

The state energy regulator has directed MSEDCL to demonstrate in a quantitative manner how the proposed deviations in the tender documents are in the interest of consumers.

In March, MSEDCL had floated a tender to procure 1,600 MW of thermal power and 5,000 MW of solar power in Maharashtra. This happened just before the Model Code of Conduct came into force for the Lok Sabha elections.

The purchase of electricity was intended to cover the demand for 2033-34, i.e. in 10 years.

MERC in its order has sought clarification from MSEDCL that since the proposed power procurement undertaken to meet the demand for 2033-34 will commence with commissioning in the next 2-4 years, therefore, such early execution of the contract would not result in creation of stranded generation capacity.

MERC also wanted to know whether the Maharashtra state power utility had secured enough power to meet the projected demand by 2033-34, as per the order.

MERC asked MSEDCL to explain its reasons for considering purchasing combined solar and thermal power from a single entity. The Commission wants to know whether all future heat procurement will be based on the same principle.

According to sources, MSEDCL aims to finalise the bidding process in July, ahead of the release of the code of conduct for the state elections due in October 2024.

According to an industry source, projects of this scale would require an investment of around Rs 40,000 crore. Any interested party wishing to bid will have to get bids from equipment suppliers, freeze funding and also arrange other essential elements of the project such as land, water and transmission.

The tender does not provide sufficient time for interested parties to meet these basic requirements. They add that this may lead to limited participation, which is not in the consumer’s interest and may result in higher energy purchase costs and tariffs.

The source added that allowing enough time for wider participation in the tender will always be in the interest of consumers as energy demand starts in 2033.

MSEDCL has 7 days to submit applications on queries submitted by MERC. The next hearing date is set for July 2, 2024. PTI ANZ MR

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