Authority: Supreme Court of India

Order Date: 09-09-2026

Case Overview

  • Appeal No(s). 10542‑10546/2026 filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) against the Appellate Tribunal for Electricity (APTEL) order dated 13‑03‑2026.
  • Under Ministry of Power (MoP) Battery Energy Storage Systems (BESS) guidelines dated 10‑03‑2022, MSEDCL issued a Request for Selection (RfS) on 25‑07‑2025 for 2,000 MW/4,000 MWh BESS capacity, initially permitting two cycles per day.
  • Addendum dated 07‑09‑2025 amended the cycles to one per day, i.e., 5,475 cycles over the 15‑year contract period.
  • Technical and financial bids were opened between 03‑11‑2025 and 05‑11‑2025; the lowest tariff of Rs 1,65,998 per MW per month was identified and awarded to the successful bidders.
  • MSEDCL filed a petition before the Maharashtra Electricity Regulatory Commission (MERC) for adoption of the discovered tariff; MERC approved the tariff on 06‑03‑2026.
  • MoP issued a letter on 31‑12‑2025 granting MSEDCL a contractual right to use the BESS for at least 6,300 cycles during the contract period without additional cost; the letter was stated to be a condition for Viability Gap Funding (VGF) under the PSDF scheme, not a change to the RfS.
  • Respondents argued that the 6,300‑cycle condition effectively altered the tender, jeopardising their financial calculations and VGF eligibility, and should be treated as a mandatory obligation.
  • APTEL, in March 2026, set aside MERC’s order, quashed the bidding process and the letters of allotment, and directed MSEDCL to return the security deposit within four weeks, finding the undertaking by MSEDCL unsatisfactory.

Final Outcome

  • The Supreme Court stayed the APTEL order dated 05‑06‑2026, thereby preserving the MERC‑approved tariff of Rs 1,65,998/MW per month and the 2,000 MW/4,000 MWh BESS allocation.
  • The Court issued notice to the respondents, returnable on 02‑Nov‑2026, and directed that the Union of India, through Solicitor General Tushar Mehta, be heard on the matter.
  • A status‑quo order was imposed, requiring the bank guarantees posted by the respondents to remain in force.
  • The stay does not affect successful bidders who wish to proceed with contract execution; MSEDCL indicated it would subsidise bidders if the VGF scheme is not granted.

Topics: Battery Energy Storage, Regulatory Dispute