Markets & Policy

Madhya Pradesh Finalizes Standard Operating Procedure for Green Energy Banking

September 7, 2026 By Gaurav Nathani 6 min read
0:00 / 07:09

On August 17, 2026, the Madhya Pradesh Electricity Regulatory Commission (MPERC) issued a formal order establishing the Standard Operating Procedure (SOP) for the Banking of Power by Green Energy Open Access (GEOA) consumers. This regulatory framework operationalizes the 2023 Open Access and Banking Charges Regulations, providing the technical and financial protocols necessary for the management of surplus renewable energy. The SOP introduces a 30% monthly banking cap and a mandatory 8% in-kind charge, providing long-term visibility for commercial and industrial (C&I) consumers and distribution licensees regarding energy settlement and cost recovery.

Regulatory Context and Scope

The SOP centers on the implementation of MPERC’s previous directives in Petition No. 29 of 2025. It aligns the state’s energy accounting with the mandatory Renewable Purchase Obligation (RPO) trajectory, which is set at 30% for FY 2025-26. Third-party open access remains governed by a 1 MW minimum contracted demand threshold at the 33 kV level.

The state has further identified “Green Zones,” defined as high-irradiation corridors with solar resources exceeding 5.5 kWh/m²/day. Projects and off-takers within these zones are eligible for specific incentives, including the waiver of the Cross-Subsidy Surcharge (CSS) and a 7-year exemption from electricity duty starting from the date of project commissioning.

The SOP applies to the following Obligated Entities:

  • Distribution Licensees (DISCOMs)
  • Captive users
  • High Tension (HT) Open Access consumers

Key Provisions of the Standard Operating Procedure

The SOP establishes a technical framework for energy accounting and grid management:

  • The Banking Cycle: Banking operates on a three-month rolling cycle (Month n, n+1, and n+2). Energy banked in the initial month must be utilized within the succeeding two months. Any surplus energy remaining at the conclusion of this cycle is deemed to have lapsed.
  • REC Entitlement: Under Clause 5.7 of the SOP, Associated Green Energy Generators are entitled to Renewable Energy Certificates (RECs) to the extent of any banked energy that lapses at the end of a cycle.
  • Energy Accounting: Settlement is conducted in 15-minute time blocks. The SOP maintains a distinction between peak and off-peak energy; while peak-period banked energy can be adjusted against consumption in any period, off-peak banked energy is restricted to off-peak drawal only.
  • Default and Cure Period: In the event of a “GEOA Consumer Event of Default”—such as financial default on charges or metering tampering—the DISCOM will issue a notice providing a seven-day cure period. Failure to remedy the default results in the immediate termination of the banking arrangement.

Banking Mechanism, Caps, and Charges

The SOP provides a dual-layered charge structure consisting of in-kind deductions and monetary compensation for power procurement.

  • The 30% Cap and Reduction Factor (R.F.): Banking is limited to 30% of the consumer’s total monthly electricity consumption from the DISCOM. To ensure compliance while maintaining equity across all time blocks, the SOP utilizes a Reduction Factor (R.F.) formula:
    • BEi adjusted = BEi x R.F.
    • R.F. = (30% of Total Monthly Consumption) / (Total Surplus Energy Banked)
  • The 8% In-Kind Charge: A mandatory 8% in-kind charge is deducted from the surplus energy units at the time of banking. These units become the property of the Distribution Licensee or MP Power Management Co. Ltd. (MPPMCL) and cannot be credited or carried forward.
  • Additional Monetary Charges and True-up: In addition to in-kind deductions, the SOP allows for monetary charges to compensate the licensee for the actual costs of arranging power to return banked energy. Per Clause 9.2.d, the Distribution Licensee must reconcile these charges at the end of each financial year based on actual power purchase costs. Any differential is claimed through a separate petition filed alongside the annual True-up Petition, which may include applicable carrying costs.

Application and Approval Process

The administrative workflow for banking facilities involves multiple nodal agencies, with the State Load Despatch Centre (SLDC) holding primary responsibility for “Scheduling and Injection” management.

  • Submission Timelines:
    • LTOA/MTOA: Applications must be filed with the Distribution Licensee at least 15 days prior to the proposed start date.
    • STOA: Banking applications must be submitted concurrently with the STOA application.
  • Document Checklist:
    • Board Resolution/Authorization Letter.
    • Connectivity Agreements and PPA/PSA copies.
    • 0.2s Class ABT meter calibration reports.
    • NOC from the generator and a No-Dues Certificate from the DISCOM.

Comparison of Open Access Scenarios (6th Amendment Integration)

The SOP integrates with the demand declaration framework established by the 6th Amendment to the Open Access Regulations. The following table details the impact of each billing scenario:

ScenarioEnergy/Demand AdjustmentSurcharge LiabilityRegulatory Requirement
Within Contract Demand15-minute block energy adjustment only.₹1.18/kWh Additional Surcharge is waived.Bypasses Technical Feasibility Study.
Above Contract DemandEnergy and demand adjusted in 15-minute blocks.₹1.18/kWh Additional Surcharge applies (except captive).Mandatory Technical Feasibility Study.
Hybrid (Within + Above)Demand adjustment on the excess portion only.₹1.18/kWh applies to the excess portion (except captive).Feasibility Study required for excess.

Under Scenario 1 (Within Contract Demand), consumers benefit from a streamlined approval process that omits the technical feasibility hurdle, alongside the waiver of the ₹1.18/kWh additional surcharge. For Scenarios 2 and 3, network feasibility assessments remain a prerequisite for approval.

Official Regulatory & Policy Sources

  • Madhya Pradesh Electricity Regulatory Commission (MPERC)
    • Document: MPERC Order approving the Standard Operating Procedure (SOP) for Banking of Power for Green Energy Open Access (GEOA) Consumers (Petition No. 29 & IA No. 21 & 23 of 2025).
    • Date: 17 August 2026.
    • Official Link: Download MPERC Banking SOP Order (17.08.2026).
  • Madhya Pradesh Gazette (मध्यप्रदेश राजपत्र)
  • Gujarat Electricity Regulatory Commission (GERC)
  • Ministry of New and Renewable Energy (MNRE), Government of India
  • Ministry of Petroleum and Natural Gas (MoPNG), Government of India

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