PSERC Approves ₹2.84/kWh Reduced Tariff for Two Intrastate 50 MW Solar Projects in Punjab

Regulatory Authorization

The Punjab State Electricity Regulatory Commission (PSERC) has finalized the FY 2026-27 operational framework, authorizing Punjab State Power Corporation Limited (PSPCL) to procure 50 MW of power from two intrastate solar projects. This regulatory authorization validates the tariff discovery at a revised and reduced rate of ₹2.84/kWh (~$0.03/kWh). The decision reflects the Commission’s ongoing mandate to balance utility-scale procurement needs with a strict “prudence check” on landed costs at the state periphery to ensure consumer affordability.

Project Specifications and Financial Terms

The approved procurement involves a cumulative capacity of 50 MW to be integrated into the state’s energy mix via PSPCL. The developer for this facility has been identified as SAEL Ltd. This tariff approval was issued under the proceedings of Petition No. 70 of 2025, which sets the financial benchmarks for the upcoming fourth control period. The regulatory bench presiding over the order included Chairperson Viswajeet Khanna, Ravinder Singh Saini (Member, Technical), and Ravi Kumar (Member, Legal). The Commission’s approval specifically validates the reasonableness of the ₹2.84/kWh rate, providing a formal mechanism for long-term power purchase agreements (PPAs) between the developer and the state utility.

Background and Procedural Context

The approval is a pivotal component of the PSERC Tariff Order for FY 2026-27, which includes the “true-up” of FY 2024-25 and the determination of the Annual Revenue Requirement (ARR). During the review process, the Commission exercised significant oversight regarding distribution efficiency. Specifically, the Commission rejected PSPCL’s proposed distribution loss trajectory of 12.75%, mandating a tighter target of 10%. This 2.75% reduction in the loss target was a primary driver in generating the financial surplus that allowed the Commission to pass on a total relief of ₹7,851.91 crore to state consumers.

Furthermore, the technical basis for the new tariff structure is supported by the fixing of the Average Cost of Supply (ACoS) for FY 2026-27 at ₹6.15 per unit. This represents a significant decrease from the ₹7.15 per unit benchmark established for FY 2025-26, signaling an improvement in the state’s procurement efficiency.

Integration with State Clean Energy Objectives

This procurement aligns with Punjab’s strategic objective to solarize the agricultural sector and reduce the state exchequer’s burden. New and Renewable Energy Sources Minister Aman Arora noted that such projects, particularly through feeder-level solarization, are expected to mitigate the annual agricultural subsidy bill by approximately ₹176 crore. Power Minister Harbhajan Singh confirmed the synchronization of these specific projects, noting that the cumulative solar capacity in the state has reached 2,081 MW, with nearly 2,850 MW of additional renewable projects currently under commissioning.

A notable aspect of this regulatory decision is the Commission’s discretion regarding tariff ceilings. While PSERC recently rejected a separate 2,200 MW interstate solar procurement bid because its weighted landed cost (~₹3.03/kWh) exceeded the established ₹2.72/kWh ceiling, the ₹2.84/kWh tariff for these intrastate projects was deemed reasonable. This distinction highlights the Commission’s preference for direct intrastate procurement over intermediary-mediated bids that often incur additional trading margins.

Regulatory Fact Summary

Metric	Approved Value/Details
Regulatory Authority	PSERC
Primary Buyer	PSPCL
Developer	SAEL Ltd
Approved Tariff	₹2.84/kWh
Cumulative Capacity	50 MW
Project Classification	Intrastate Solar
State ACoS (FY 2026-27)	₹6.15 per unit
Banking Settlement Period	June 1 to May 31

The revised tariff structure and the associated energy banking regulations, which allow for a settlement period from June 1 to May 31 of the following year, are scheduled to take effect on April 1, 2026.

Official Sources & Regulatory Filings

Punjab State Power Corporation Limited (PSPCL)
- Document: Additional Submissions in respect of Petition (No. 70 of 2025) for True-up of FY 2024-25 and ARR for the MYT Petition for 4th Control period from FY 2026-27 to FY 2028-29.
- Official Website: https://www.pspcl.in
Punjab Energy Development Agency (PEDA)
- Document: Renewable Purchase Obligation (RPO) Compliance, Manuals, and Notifications.
- Official Website: https://www.peda.gov.in/rpo
Punjab State Electricity Regulatory Commission (PSERC)
- Reference: While the direct portal was not provided as a standalone source, the official regulatory orders (e.g., Order dated 06.02.2026) are the primary legal basis for the submissions and tariff approvals discussed in the records.
- Official Website: https://pserc.punjab.gov.in (Note: This URL is the standard official domain for the Commission).