The Central Electricity Regulatory Commission (CERC) issued an order on March 20, 2025, regarding petition filed by the Damodar Valley Corporation (DVC). The petition sought the determination of a project-specific levelized tariff for an 8 MW Ground Mounted Solar Photovoltaic (PV) Power Project located at Panchet, West Bengal. DVC filed the petition under Sections 62 and 79(1)(a) of the Electricity Act, 2003, in accordance with the CERC Tariff Regulations for Renewable Energy Sources.
DVC is a multi-functional organization engaged in power generation and supply in West Bengal and Jharkhand. The company filed this petition to fulfill its Renewable Purchase Obligations (RPO) and contribute towards India’s long-term Net Zero vision. The respondents in the case were West Bengal State Electricity Distribution Company Limited (WBSEDCL) and Jharkhand Bijli Vitran Nigam Limited (JBVNL).
The 8 MW Solar PV project, originally scheduled for commissioning in May 2024, was delayed and rescheduled for October 30, 2024. DVC requested the determination of a levelized tariff for 25 years. The petition also included a request to allow recovery of fees and charges such as SLDC charges and tariff filing fees. Additionally, DVC requested permission to approach the commission in the future if module degradation impacts generation.
DVC awarded the Engineering, Procurement, and Construction (EPC) contract through a transparent e-tendering process, followed by a reverse auction. The total capital cost submitted by DVC was ₹4793.96 lakh, including an EPC cost of ₹4664 lakh. However, CERC approved a lower capital cost of ₹4569.34 lakh after excluding certain estimated and lump sum costs and rejecting the inclusion of the cost associated with the diversion of a 33 KV transmission line.
DVC proposed a debt-equity ratio of 80:20, which the commission accepted. The interest rate on the loan was considered at 8.3% per annum, based on the terms approved by Punjab and Sind Bank. CERC set the return on equity (ROE) at 16.96% for the first 20 years and 21.52% for the remaining 5 years, as per the applicable tax rates. Depreciation was approved at 4.67% for the first 15 years and 2% thereafter.
The commission noted that DVC’s proposal did not include auxiliary consumption, and the capacity utilization factor (CUF) was set at 22.5%, which exceeds the minimum requirement of 21% under CERC regulations. Operation and maintenance (O&M) expenses were approved at ₹43.89 lakh in the first year, with an escalation of 5% for the initial five years and 3.84% thereafter.
CERC determined an interim levelized tariff of ₹3.62 per kilowatt-hour (kWh), lower than DVC’s proposed tariff of ₹3.92/kWh. This tariff will remain interim until DVC submits final actual cost data after the project’s commissioning.
The commission also directed DVC to explore competitive bidding for future projects rather than seeking project-specific tariffs. DVC confirmed that the entire power generated would be used to meet its RPO obligations, making the possibility of selling excess power unlikely at this stage.
This order is a key step in ensuring regulatory compliance and cost efficiency in renewable energy projects within India’s energy sector.
