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 arrangement 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 per cent shareholding by Druk Green Power Corporation Ltd (DGPC) and 40 per cent 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 both for the source and for the draft Power Sale Agreement (PSA), proposing 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 had been computed under the CERC Tariff Regulations, 2024, with the Bus-Bar Levelized Tariff working out to INR 6.47/kWh and the tariff at the delivery point reaching INR 6.75/kWh after adding “estimated transmission charges up to the Indo‑Bhutan border amounting to INR 0.28/kWh.” It recorded that the INR 6.75/unit price will “remain fixed for the entire duration of 30 years without any annual escalation.”
UPERC first examined its own jurisdiction and the cross‑border framework. It reiterated that under Section 86(1)(b), the Commission regulates the “electricity purchase and procurement process of distribution licensee including the price at which electricity shall be procured” for supply in Uttar Pradesh.
At the same time, 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 order said that a “participating entity must be approved by the designated authority for the purpose of cross border trade of electricity” and makes the UPERC approval expressly subject to compliance with these central‑level requirements.
The Commission recorded that all transmission charges, losses and operational charges “up to the Indo‑Bhutan Periphery shall be borne by TPTCL,” while UPPCL will bear network charges and losses beyond that point, including GNA and state transmission charges.
UPERC noted that a trading margin of 5 paise/unit “has been mutually agreed upon between TPTCL and the generator (KHPL)… which is already inclusive in the INR 6.75/unit tariff,” so “no separate or additional amount shall be payable towards trading margin over and above the aforesaid tariff.” Settlement Nodal Agency charges have also “been factored into the tariff of INR 6.75 per unit,” with TPTCL undertaking not to seek tariff adjustments if those charges change.
The order recorded that 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 with 4 hours of storage capacity to substantially assist UPPCL in meeting its peak hour power requirement.”
The Commission 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.
