KERC Grants Deemed Approval for Renewal of Mini-Hydro and Wind PPAs Completing 20-Year Term
The Karnataka Electricity Regulatory Commission has issued a suo motu order providing deemed approval for the renewal of Power Purchase Agreements of eligible mini-hydro and wind projects completing their initial 20-year term, subject to specified conditions.
July 14, 2026. By Mrinmoy Dey
The Commission noted that under its earlier March 4, 2024 order, tariffs for mini-hydro, wind, bagasse-based cogeneration and biomass-based power projects were allowed for a further 10-year period beyond the initial 20-year PPA term. ESCOMs had also been directed to initiate the renewal process and submit the renewed PPAs for the Commission's approval.
However, KERC observed that renewal proposals were being submitted with considerable delays, often after the expiry of the original agreements. It also noted that generators were approaching the Commission seeking condonation of delays even though the existing PPAs required the renewal process to be completed before the end of the initial 20-year period.
According to the Commission, these delays have resulted in renewable energy generators continuing to supply electricity without renewed PPAs, leading to payment issues for the energy injected into the grid.
To address the issue, KERC has directed mini-hydro and wind generators willing to continue supplying power beyond the initial 20-year term to submit applications for PPA renewal at least 90 days before the expiry of the existing agreement. The generators must agree to supply power at 85 percent of the 20th-year tariff or a mutually negotiated tariff, whichever is lower, in line with the Commission's March 2024 order.
The Commission has further directed ESCOMs to decide on the continuation of the PPA before the expiry of the existing agreement. Where power procurement is required, ESCOMs must negotiate the tariff and execute the renewal PPA or Supplemental PPA (SPPA) for a further 10-year period before the original agreement expires. If power is not required, the generator must be informed before the expiry of the existing PPA.
Under the new order, all renewal PPAs or SPPAs executed in accordance with these provisions will be deemed to have been approved by the Commission, eliminating the need for prior regulatory approval.
KERC has also provided relief in cases where generators apply for renewal within the stipulated timeline, but ESCOMs fail to act. In such instances, the existing PPA will be deemed extended in accordance with the Commission's March 4, 2024 order. The deemed approval, however, remains subject to the Commission's final decision in the event of any dispute or error in the renewed agreements.
The Commission has directed ESCOMs to submit copies of all renewed PPAs and SPPAs to KERC for information, along with the applicable regulatory fee.
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