DEEDEV's Biomass Power Tariff Slashed by PSERC, Faces ₹13.02 Crore Retrospective Demand
The order results in a direct financial outflow of ₹13.02 crore due to retrospective tariff differential and a recurring annual revenue loss of approximately ₹8.20 crore, significantly impacting the company's profitability and cash flow from its renewable energy segment.
The Punjab State Electricity Regulatory Commission (PSERC) ordered a downward revision of the tariff for the company's 8 MW biomass power plant, leading to a significant retrospective recovery demand of ₹13.02 crore and an estimated annual revenue reduction of ₹8.20 crore. The management expressed deep disappointment and considers the order unjust.
DEE Development Engineers Limited announced that the Punjab State Electricity Regulatory Commission (PSERC), via an Order dated August 20, 2025, approved a re-determined tariff for its 8 MW biomass-based power plant in Fazilka, Punjab. * The order stems from a review petition filed by the company against PSERC's May 15, 2025, order, which had determined the tariff for the period from January 1, 2024, to February 4, 2029. * The new tariffs are significantly lower than the previous net rate of ₹7.47 per KWH (up to December 2023). The revised net tariff rates are: * ₹5.477 per KWH for FY 2023-24 * ₹5.672 per KWH for FY 2024-25 * ₹5.877 per KWH for FY 2025-26 * Financial Impact: * Retrospective Recovery: Punjab State Power Corporation Limited (PSPCL) may demand ₹13.02 crore for the period between January 1, 2024, and April 30, 2025, due to the tariff differential. * Projected Revenue Decline: The company estimates an annual revenue reduction of approximately ₹8.20 crore going forward under the revised rates. * Commenting on the order, Mr. KL Bansal, Chairman and Managing Director, expressed deep disappointment, stating the order is "legally untenable, procedurally flawed, and fundamentally unjust." He emphasized that the price revision should have resulted in retaining or enhancing the existing price, not reducing it. * Mr. Bansal criticized the Commission's use of a cost benchmarking methodology based on co-generation entities, which he stated is not comparable to standalone biomass plants reliant on externally procured agricultural residue like paddy straw. * He highlighted the plant's significant socio-economic contributions, including employment for over 5,000 rural families, disbursement of over ₹250 crore to local communities over its lifecycle, and annual infusion of ₹20-25 crore into the rural economy through paddy straw procurement. * Environmentally, the plant prevents stubble burning on over 45,000 acres annually, utilizes 85,000 MT of paddy straw, and mitigates over 1,25,000 MT of CO₂. * Strategic Response: The company's Board of Directors will convene to discuss a multi-pronged strategy, including potentially filing an appeal before the Appellate Authority to challenge the order and the retrospective recovery demands.
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