PSERC Cuts Tariff for DEE’s Abohar Biomass Plant

22 Aug 2025 CW Team

The order, dated 20 August 2025, follows a review petition filed by the company against PSERC’s earlier decision of 15 May 2025. The revised tariff will apply for the remaining useful life of the project, from 1 January 2024 to 4 February 2029.

Tariff Revision:

The applicable tariff has been reduced significantly. While the previous tariff (up to December 2023) stood at Rs 7.47 per unit, the revised rates are Rs 5.477 per unit for FY 2023–24, Rs 5.672 for FY 2024–25, and Rs 5.877 for FY 2025–26.

Financial Impact:

Between January 2024 and April 2025, the plant supplied 75.7 million units of electricity to Punjab State Power Corporation Limited (PSPCL). PSPCL may now raise a retrospective recovery claim of about Rs 130.2 million due to tariff differentials.
Looking ahead, the company estimates an annual revenue reduction of around Rs 82 million if the revised tariff continues to apply.

Company’s Response:

Chairman and Managing Director K.L. Bansal expressed disappointment, calling the order “legally untenable, procedurally flawed, and fundamentally unjust.” He argued that the benchmarking against co-generation units such as sugar mills ignores the higher costs faced by standalone biomass plants dependent on agricultural residue like paddy straw.

The company highlighted the wider value of its operations, which support over 5,000 rural families, inject more than Rs 2.5 billion into local communities over the project’s life, and annually prevent stubble burning on 45,000 acres, mitigating over 125,000 tonnes of CO₂ emissions.

Next Steps:

DEE Development Engineers plans to convene a Board meeting to evaluate its strategy. Options under consideration include legal recourse before the appellate authority and exploring all regulatory measures to safeguard contractual rights and commercial interests.

The company reaffirmed its commitment to renewable energy, rural empowerment, and sustainable stubble management practices, positioning its biomass projects as key contributors to India’s clean energy transition.

DEE Development Engineers Limited has announced that the Punjab State Electricity Regulatory Commission (PSERC) has issued its final order re-determining the tariff for the company’s 8 MW biomass-based power plant in Abohar, Fazilka district, Punjab.The order, dated 20 August 2025, follows a review petition filed by the company against PSERC’s earlier decision of 15 May 2025. The revised tariff will apply for the remaining useful life of the project, from 1 January 2024 to 4 February 2029.Tariff Revision:The applicable tariff has been reduced significantly. While the previous tariff (up to December 2023) stood at Rs 7.47 per unit, the revised rates are Rs 5.477 per unit for FY 2023–24, Rs 5.672 for FY 2024–25, and Rs 5.877 for FY 2025–26.Financial Impact:Between January 2024 and April 2025, the plant supplied 75.7 million units of electricity to Punjab State Power Corporation Limited (PSPCL). PSPCL may now raise a retrospective recovery claim of about Rs 130.2 million due to tariff differentials.Looking ahead, the company estimates an annual revenue reduction of around Rs 82 million if the revised tariff continues to apply.Company’s Response:Chairman and Managing Director K.L. Bansal expressed disappointment, calling the order “legally untenable, procedurally flawed, and fundamentally unjust.” He argued that the benchmarking against co-generation units such as sugar mills ignores the higher costs faced by standalone biomass plants dependent on agricultural residue like paddy straw.The company highlighted the wider value of its operations, which support over 5,000 rural families, inject more than Rs 2.5 billion into local communities over the project’s life, and annually prevent stubble burning on 45,000 acres, mitigating over 125,000 tonnes of CO₂ emissions.Next Steps:DEE Development Engineers plans to convene a Board meeting to evaluate its strategy. Options under consideration include legal recourse before the appellate authority and exploring all regulatory measures to safeguard contractual rights and commercial interests.The company reaffirmed its commitment to renewable energy, rural empowerment, and sustainable stubble management practices, positioning its biomass projects as key contributors to India’s clean energy transition.

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