The Punjab State Electricity Regulatory Commission has set a new tariff for the 6 MW biomass power plant of Malwa Power Pvt. Ltd., allowing operations to continue for another 10 years after the expiry of its original power purchase agreement, the company stated in a regulatory filing.
In its order dated March 27, 2026, the regulator fixed the tariff at Rs 5.224 per kWh for 2025–26, replacing the interim rate of Rs 3.50 per kWh. The revision marks an increase of nearly 49% and will be subject to a 5% annual rise in the variable component.
The plant, located in Muktsar district, was commissioned in 2005 and had been supplying power to Punjab State Power Corporation Limited under a 20-year agreement that ended in April 2025. The company had approached the commission for tariff determination for an extended term, as permitted under the agreement.
Following the revised tariff, the company is expected to recover around Rs 5.8 crore as additional revenue for electricity supplied between May 2025 and February 2026, when it was paid at the lower interim rate.
Looking ahead, the company has projected power generation revenue of about Rs 24.31 crore for 2026–27, assuming operations at 85% capacity. In addition, a biomass pellet plant at the same site is set to begin operations, with an estimated annual revenue of around Rs 23.40 crore. Together, both units could generate nearly Rs 48 crore annually.
Despite the tariff increase, the company has expressed concerns over the calculation of fixed and variable costs, stating that the rates determined are lower than expected. It is considering filing an appeal before the Appellate Tribunal for Electricity to seek a revision in line with updated regulatory norms.
Company officials said that while the revised tariff improves financial viability, further correction would be needed to fully reflect current operating costs.
