Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CERC) 199

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
NHPC Limited – Appellant
Versus
Teerth Gopicon Limited – Respondent
Petition No. 643/AT/2025

Advocates:
For the Appellants/Petitioners: Rajiv Shankar Dvivedi, Sushant Sarkar

The Commission holds the authority under Section 63 to adopt tariffs determined through transparent competitive bidding; however, implementation of additional procurement mechanisms not explicitly provided for in government guidelines requires regulatory sanction to ensure consistency, transparency, and a level playing field among all participating bidders.

Headnote:(A) Electricity Act, 2003 - Sections 61, 63, 79 and 86(1)(e) - Tariff adoption - Competitive bidding - Adoption of tariff discovered through transparent competitive bidding process where Intermediary Procurer seeks to procure solar power - Commission requires adherence to guidelines - Adoption of tariff is subject to satisfaction regarding transparent process - (Paras 21-25)

(B) Regulatory Compliance - Trading Margin - Regulation 8 and 9 of Trading Licence Regulations, 2020 - Trading margin for long-term contracts must be mutually agreed but remains subject to caps where security instruments like escrow or letters of credit are not provided - (Paras 47-50)

Facts of the case:
An intermediary procurer invited bids for the procurement of solar power capacity under a competitive bidding process including a specific optional capacity expansion mechanism. Multiple bidders were selected and tariffs were discovered via e-reverse auction. The petitioner sought approval of these tariffs and a trading margin for acting as an intermediary. The commission examined the bidding process, the inclusion of the optional expansion clause, and the reasonableness of the discovered rates compared to previous market benchmarks.

Findings of Court:
While the bidding process generally met the criteria for transparency and competitiveness, the commission observed that the optional expansion mechanism used by the petitioner lacks an explicit definition or specific authorization within the central government guidelines. Consequently, the commission limited the capacity allocation for certain bidders to maintain consistency with the original competitive framework and directed future consultations with the central government to ensure regulatory certainty.

Issues: The main issues were the validity of adopting tariffs discovered through a bidding process incorporating an undefined expansion option and the reasonableness of the trading margin requested by the intermediary.

Ratio Decidendi: Under Section 63 of the Act, the Commission must adopt tariffs resulting from a transparent bidding process conducted in accordance with central guidelines. While the utility of expansion mechanisms for procurement efficiency is acknowledged, the absence of an explicit statutory or regulatory basis for such mechanisms necessitates regulatory oversight to ensure fairness and prevent inconsistencies in public procurement parameters.

Result: Petition disposed of with directions for regulatory clarification and conditional approval of tariffs and trading margins.

Table of Content
1. initiation and background of competitive bidding for solar capacity procurement. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. petitioner's justification for the inclusion of the 'greenshoe option' and tariff reasonability. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
3. statutory framework under section 63 for tariff adoption by the commission. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26)
4. procedural compliance and verification of the competitive bidding process milestones. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
5. condonation of procedural delays and affirmation of tariff reasonability. (Para 35 , 36 , 37 , 38)
6. regulatory concern regarding the lack of explicit guidelines for greenshoe options. (Para 39 , 40 , 41 , 42)
7. final tariff adoption with restricted greenshoe capacity allocation. (Para 43 , 44 , 45)
8. legal limits and conditions governing trading margin recovery. (Para 46 , 47 , 48 , 49 , 50 , 51)

IN THE MATTER OF:

Petition under Section 63 of the Electricity Act 2003 for Adoption of Tariff for the ISTS Grid connected Solar Power projects of 1200 MW and with additional capacity upto 1200 MW with “Greenshoe Option” selected through Competitive Bidding Process under Tariff Based Competitive Bidding Guidelines issued by Ministry of Power, Govt. of India on 28.07.2023 and its amendments thereof. (NHPC Tranche-IX, Tender ID: 2024_NHPC_825552_1)

And

In the matter of:

NHPC Limited,

NHPC Office Complex, Sector-33,

Faridabad (Haryana) - 121003.

...... Petitioner

VERSUS

1 Teerth Gopicon Limited

105, Amar Metro Nr. Balniketan Sangh,

Pagnis Paga,Indore-452007 (Madhya Pradesh)

2 Hanur Solar Power Private Limited

65, Sardar Patel Marg, C Scheme

Ashok Nagar, Jaipur -302001 (Rajasthan)

3 ReNew Solar Power Private Limited

Renew Hub Commercial Block-1,

Zone-6, Golf Course Road, DLF City, Phase V,

Gurgram -122009( Haryana)

4 Avaada Energy Private Limited

C-11, Sector -65, Noida,

Uttar Pradesh -201301.

5 Bharat Petroleum Corporation Limited

Bharat Bhawan-III, Shanti Building,

13, Walchand Hirachand Marg,

Ballard Estate , Fort Mumbai -400001(Maharashtra)

......Respondents

Parties Present:

Shri Rajiv Shankar Dvivedi, Advocate, NHPC

Shri Sushant Sarkar, Advocate, NHPC

ORDER

1) Admit the present Petition.

2) Adopt the Tariff discovered in the Competitive Bidding Process for individual Power Projects as listed in Table-1 at paragraph 11 on terms and conditions contained in the PPA to be signed with Solar Power Generators being Respondent Nos 1 to 5 and a Trading Margin of Rs. 0.07/kWh in addition to above Tariff is to be recovered from buying Utilities/ Distribution Licensee/ DISCOM(s) in terms of the PSA to be signed between NHPC & Utilities/ Distribution Licensee.

3) Pass such other and further order/orders as are deemed fit and proper in the facts and circumstances of the case.

Submissions of the Petitioner

2. The Petitioner, NHPC, has been designated as a Renewable Energy Implementing Agency (hereinafter referred to as ‘REIA') by the Ministry of New and Renewable Energy (hereinafter referred to as ‘MNRE’), vide Office Memorandum, No. F. No. 283/33/2020-GRID SOLAR, for enabling procurement from solar PV power plants, by Distribution Licensees. In order to promote competitive procurement of electricity and to facilitate Solar PV capacity addition and fulfilment of Renewable Purchase Obligation (RPO)/ Energy Storage Obligations (ESO) requirement of DISCOMs.

3. In line with the REIA – wise bidding calendar issued by MNRE, the Petitioner NHPC, invited bids for selection of Solar Power Setting up of 1200 MW (1.2 GW) ISTS (Inter State Transmission System) Connected Solar Power Projects on anywhere in India basis under Tariff Based Competitive Bidding with Green Shoe Option and entering into Power Purchase Agreements (PPA) at the tariff discovered in the competitive bid process with the selected Solar Power Generator (hereinafter referred to as 'SPGs') and entering into Power Sale Agreement (hereinafter referred to as

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2026 Supreme(Online)(CERC) 199

CENTRAL ELECTRICITY REGULATORY COMMISSIONJishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, MemberNHPC Limited – AppellantVersusTeerth Gopicon Limited – RespondentPetition No. 643/AT/2025

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
NHPC Limited – Appellant
Versus
Teerth Gopicon Limited – Respondent
Petition No. 643/AT/2025