The Appellate Tribunal for Electricity (APTEL) has upheld a Central Electricity Regulatory Commission (CERC) order rejecting the adoption of the tariff for a 500 MW/1000 MWh Standalone Battery Energy Storage Systems (BESS) pilot project. The tribunal dismissed appeals filed by the Solar Energy Corporation of India (SECI) and the developer, JSW Renew Energy Five Ltd, concluding that the discovered tariff was no longer aligned with market realities. The ruling affirms the regulator’s authority to decline tariff adoption under Section 63 of the Electricity Act, 2003, if the price is found to be contrary to consumer interest.
Project Timeline and Regulatory History
The regulatory rejection follows a three-year progression from the initial tender to the final dismissal in January 2025. The project cycle was marked by significant delays that contributed to the misalignment between the auctioned price and subsequent market benchmarks.
- August 2022: SECI conducted the initial auction for the 500 MW/1000 MWh BESS pilot project located at Fatehgarh III.
- Letter of Award (LoA) Delay: A 145-day delay occurred between the auction and the issuance of the Letter of Award to JSW Renew Energy Five Ltd.
- March 2024: The Battery Energy Storage Purchase Agreement (BESPA) was formally signed, nearly nineteen months after the bid.
- January 2025: The CERC issued its final determination rejecting the tariff adoption, a decision subsequently upheld by APTEL.
Legal Basis: Interpretation of Section 63
The tribunal’s decision centers on the interpretation of Section 63 of the Electricity Act, 2003, which governs the adoption of tariffs discovered through a competitive bidding process. APTEL clarified that the Commission’s mandate is not limited to functioning as a “rubber stamp” for auctioned results.
Per the tribunal’s order, the regulator maintains a statutory duty to ensure that discovered prices protect the interests of end consumers. The tribunal observed that the excessive delay in the project cycle created a “temporal misalignment,” where the tariff discovered in 2022 no longer reflected the significantly lower costs prevalent in the BESS market by the time the petition reached the Commission. The ruling emphasized that the protection of consumer interest overrides the mere fact of a successful auction when market conditions have shifted substantially during administrative delays.
Market Comparison and Tariff Discrepancy
In its findings, the Commission observed that the auctioned prices for the pilot project were “excessively high” compared to prevailing market trends. The following table illustrates the discrepancy between the proposed project rate and subsequent benchmarks identified in later bids:
| Category | Tariff Rate (per MW per month) |
| Proposed Pilot Project Tariff | ~₹10.83 lakh |
| Subsequent Market Rates (Later Bids) | ₹3.72–4.85 lakh |
The CERC and APTEL determined that adopting a tariff of ₹10.83 lakh per MW per month—nearly three times the rate of subsequent market entries—would be detrimental to the public interest.
The Verdict: Vested Rights and Dismissal
The tribunal’s verdict provides critical clarification regarding the legal standing of successful bidders in renewable energy auctions. APTEL ruled that developers possess no “vested right” to have a tariff adopted simply by virtue of winning a competitive bid. The adoption remains subject to regulatory scrutiny and must align with the broader objective of providing affordable power to consumers.
The tribunal concluded that the delay in issuing the LoA and signing the BESPA rendered the 2022 bid price obsolete. Consequently, the appeals filed by JSW Renew Energy Five Ltd and SECI were dismissed, and the rejection of the tariff for the 500 MW/1000 MWh BESS pilot project was finalized.
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