The Bihar Electricity Regulatory Commission (BERC) has finalized generic renewable energy tariffs for the financial year 2026–27, marking the second year of the 2025–28 control period. Issued under Suo-Motu proceeding SMP 21/2026, the order establishes standardized rates for biomass power, non-fossil fuel co-generation, biomass gasifiers, and municipal solid waste (MSW) or refuse-derived fuel (RDF) projects. This regulatory framework aims to provide cost certainty for renewable energy developers while ensuring grid stability through diversified non-fossil generation.
Breakdown of Approved Generic Tariffs and Capital Costs
| Renewable Energy Category | Estimated Capital Cost (₹ lakh per MW) | Useful Life (Years) |
| Biomass Power | 638 – 744 | 25 |
| MSW / RDF | 1,500 | 20 |
| Non-fossil fuel co-generation | [Not Itemized]* | 25 |
| Biomass Gasifiers | [Not Itemized]* | 25 |
| Small Hydro Projects | [Not Itemized]* | 40 |
Notes:
- Capital Cost Range: The Commission determined that capital costs for biomass projects vary between ₹638 lakh and ₹744 lakh per MW based on fuel type and specific technology. MSW/RDF projects carry a high-end capital cost of ₹1,500 lakh per MW.
- Standardized Lifespan: While specific capital cost breakdowns for co-generation, gasifiers, and small hydro were not itemized in the proceeding excerpts, their useful lifespans are regulatory fixtures.
- Tariff Structure: Approved rates follow a single-part tariff structure, encompassing both fixed costs and, where applicable, fuel costs.
- *Useful life for co-generation and gasifier projects is standardized against the 25-year benchmark established for biomass projects.
Regulatory Financial Parameters and Assumptions
The Commission has approved the following standardized financial parameters to be applied across all eligible projects for the FY 2026–27 period:
- Debt-to-Equity Ratio: Maintained at the industry standard of 70:30.
- Interest on Loan: Fixed at an approved rate of 10.716%.
- Return on Equity (ROE): Set at 14%, subject to all applicable taxes.
- Fixed Cost Components: The tariff incorporates depreciation, interest on loans, and operation and maintenance (O&M) costs.
Stakeholder Process and Operational Scope
The finalization of these tariffs followed a structured procedural background designed to incorporate feedback from market participants and institutional bodies.
- Public Consultation: BERC held a formal public hearing at its Patna office on May 26, 2026. This followed a deadline for written stakeholder submissions on May 22, 2026.
- Key Institutional Participants: The proceedings involved the state’s primary distribution companies—North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL)—alongside consumer representatives and renewable energy developers.
- Exclusions: This order specifically excludes solar and wind energy projects. These categories are governed by separate project-specific proceedings or distinct programs, such as Component C of the PM-KUSUM scheme.
- Tariff Duration: The approved generic rates apply to all eligible renewable energy projects commissioned on or before March 31, 2027.
Related Regulatory Directives for FY 2026-27
Concurrent with the renewable energy order, BERC finalized the retail tariff environment for the same period, prioritizing consumer stability and utility efficiency.
- Retail Tariff and Slab Merger: The Commission rejected a 35 paise per unit hike proposed by DISCOMs, maintaining a “no hike” status for 22.2 million consumers. Significantly, the Commission merged tariff slabs for DS-II (urban domestic), NDS-I (rural commercial), and NDS-II (urban commercial) categories. This structural change results in effective energy charge reductions of ₹1.53/unit for urban domestic consumers, ₹0.42/unit for rural commercial, and ₹1.20/unit for urban commercial users.
- Fixed Charge Reductions: Monthly fixed charges were reduced for several categories: NDS-II (contract loads up to 0.5 kW) dropped from ₹200 to ₹150; LTIS-I (rural industrial) was reduced to ₹278/kVA; and LTIS-II (urban industrial) was reduced to ₹350/kVA.
- Distribution Loss Trajectory: Efficiency targets for the state’s utilities remain stringent, with distribution loss trajectories fixed at 11.97% for NBPDCL and 15.91% for SBPDCL.
- Agricultural Reclassification: Mushroom farming has been officially reclassified under the agricultural category. This designation extends to all cultivation methods, including the use of climate-control equipment, allowing farmers to access lower agricultural tariff rates.
Official Regulatory Sources
Bihar Electricity Regulatory Commission (BERC)
- Tariff Order (FY 2026–27):True up for FY 2024-25, APR for FY 2025-26, ARR for FY 2026-27 and Determination of Retail Tariff for North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL), issued 18 March 2026.
- Official Website: https://berc.co.in/
- Generic RE Tariff Order (FY 2026–27):Consultative Paper and Draft Regulations for determination of generic levellised Tariff for FY 2026-27 for Power Generated from Renewable Energy Sources (Suo-Motu Case No. SMP 21/2026).
- Draft Order Link: Generic Levellised Tariff Upload
Central Electricity Regulatory Commission (CERC)
- Draft RE Tariff Regulations 2024:Draft CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2024.
- Regulations Link: Draft CERC RE Regulations
- Official Website: https://www.cercind.gov.in
Ministry of Power (MoP) – Government of India
- RPO Trajectory Notifications:Order No. 09/13/2021-RCM regarding Renewable Purchase Obligation (RPO) and Energy Storage Obligation Trajectory.
- PFI Official Stakeholder Submissions: https://powerfoundation.org.in/
Parliamentary Standing Committee on Energy
- MSW Power Generation Report:Power Generation from Municipal Solid Waste – Standing Committee on Energy Report.
- Report Summary: PRS Legislative Research Summary
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