Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

APTEL Upholds KSERC’s Rejection of Power Supply Agreements Due to Bidding Violations

The Hon’ble Appellate Tribunal for Electricity (APTEL) upheld the Kerala State Electricity Regulatory Commission’s (KSERC) decision to reject Power Supply Agreements (PSAs) due to serious procedural violations in the bidding process. This decision, related to Appeal No. 518 of 2023, reinforces the critical need for transparency and regulatory compliance in power procurement.

Key Findings of the Tribunal

APTEL found that the bidding process under Section 63 of the Electricity Act, 2003, was compromised due to multiple irregularities, including:

1. Selection Beyond L1 Tariff – The procuring entity awarded contracts beyond the lowest (L1) tariff, violating competitive bidding norms and leading to inflated costs.
2. Deviation in Bid Quantities – Awarded capacities exceeded the tendered quantum without prior regulatory approval, breaching procurement guidelines.
3. Post-Bid Cost Escalation – Fixed charges were increased after the bidding process, undermining the transparency and fairness of cost determination.
4. Failure to Obtain Prior Approval – Mandatory regulatory approvals for deviations were not secured before executing the PSAs, violating statutory provisions under Section 86(1)(b) of the Electricity Act.

This ruling strengthens the sanctity of competitive bidding frameworks and affirms that regulatory bodies cannot retrospectively approve deviations that were not sanctioned during the bidding process. The judgment serves as a precedent, limiting regulatory discretion in power procurement and ensuring adherence to transparent and cost-effective bidding practices.