The Uttar Pradesh Electricity Regulatory Commission (UPERC) has cleared a long-term plan for importing 511 MW of hydropower from Bhutan’s Khorlochhu Hydro Power Station (KHPL), approving a 30-year Power Sale Agreement between Uttar Pradesh Power Corporation Ltd (UPPCL) and Tata Power Trading Company Ltd (TPTCL) at a flat tariff of INR 6.75 per unit at the Indo-Bhutan border.
KHPL is a strategic partnership with 60% shareholding by Druk Green Power Corporation Ltd (DGPC) and 40% by TPTCL. A bench of Chairperson Arvind Kumar and Member Sanjay Kumar Singh held that the deal would help UPPCL meet peak summer demand and its Hydro Purchase Obligation, while also giving “long-term price certainty” to consumers.
UPPCL had approached the Commission under Section 86(1)(b) of the Electricity Act, 2003, seeking approval for both the power source and the draft Power Sale Agreement (PSA). It proposed to procure 511 MW from May to October each year, starting 1 May 2030, at a firm tariff of INR 6.75/unit at the Indo-Bhutan periphery for 30 years.
The Commission noted that the levelised tariff was computed under the CERC Tariff Regulations, 2024: Bus-Bar Levelized Tariff at INR 6.47/kWh, transmission charges to the Indo-Bhutan border at INR 0.28/kWh, arriving at a final delivery point tariff of INR 6.75/kWh. The INR 6.75/unit price will “remain fixed for the entire duration of 30 years without any annual escalation.”
UPERC examined its own jurisdiction under the cross-border framework, reiterating that under Section 86(1)(b), the Commission regulates the electricity purchase and procurement process of distribution licensees for supply in Uttar Pradesh. It emphasised that import of power is governed by the Ministry of Power’s 2018 Guidelines on cross-border trade and CERC’s Cross Border Trade of Electricity Regulations, 2019, under which any Indian entity proposing to import power “may do so only after taking approval of the Designated Authority.” The UPERC approval is expressly subject to compliance with these central-level requirements.
All transmission charges, losses, and operational charges up to the Indo-Bhutan Periphery shall be borne by TPTCL. UPPCL will bear network charges and losses beyond that point, including GNA and state transmission charges. A trading margin of 5 paise/unit has been mutually agreed upon between TPTCL and generator KHPL, already inclusive in the INR 6.75/unit tariff, with no separate amount payable. Settlement Nodal Agency charges have also been factored into the tariff, with TPTCL undertaking not to seek tariff adjustments if those charges change.
The contracted 1,748 MUs per year from KHPL, backed by 4 hours of storage capacity, is designed so that “the project’s peak supply period is suitably aligned with the peak summer months demand… to substantially assist UPPCL in meeting its peak hour power requirement.”
UPERC concluded that the all-inclusive, non-escalable tariff “would ensure long-term price certainty and safeguard consumers against future price volatility, particularly during the peak summer months.”
Tata Power Trading Company Limited was represented by founding partner Shri Venkatesh, assisted by partner Ashutosh K. Srivastava, senior associate Aashwyn Singh, and associate Aniket Kanhaua from SKV Law Offices.
