DEE Development Engineers Limited has announced a significant regulatory development that could positively impact its financial performance. The Punjab State Electricity Regulatory Commission (PSERC) has issued a final tariff order for the company’s 6 MW biomass-based power plant, operated through its wholly owned subsidiary M/s Malwa Power Pvt. Ltd. (MPPL).

This order, dated March 27, 2026, determines the tariff for the extended operational period of the plant, marking an important milestone after the expiry of its initial 20-year useful life under the original Power Purchase Agreement (PPA).

Background of the Biomass Power Project

The biomass power plant is located in Village Gulabewala, Tehsil Mukatsar, District Mukatsar, Punjab. It was originally commissioned on April 27, 2005, under a PPA signed with Punjab State Power Corporation Limited (PSPCL) on February 19, 2004, later amended in 2013.

The initial agreement was valid for 20 years, which expired on April 26, 2025. Following this, the company sought a tariff determination for an extended period of 10 years, ensuring continued operations of the plant.

This extension is critical because biomass plants, unlike some renewable energy sources, require ongoing operational and maintenance costs, making tariff determination essential for financial viability.

Key Highlights of the Tariff Order

The PSERC has now approved a revised tariff of ₹5.224 per kWh for FY 2025-26. This tariff is structured into two components:

• Fixed Tariff: ₹0.97 per kWh
• Variable Tariff: ₹4.254 per kWh

Additionally, the variable tariff component will increase annually by 5%, ensuring protection against rising input costs such as biomass fuel.

This new tariff replaces the earlier interim tariff of ₹3.50 per kWh, which was being followed as per directions from the Appellate Tribunal for Electricity (APTEL).

Significant Tariff Increase and Its Impact

The revised tariff represents an increase of ₹1.724 per kWh, which is a substantial jump of nearly 49% over the interim tariff.

This increase is expected to have a direct positive impact on the revenue generation of Malwa Power Pvt. Ltd., and consequently, on DEE Development Engineers Limited.

According to the company:

• The tariff revision will result in additional revenue recovery of approximately ₹5.80 crore
• This recovery is linked to the difference between interim and final tariffs applied retrospectively

Such a revision strengthens the financial sustainability of the biomass project, which might otherwise face pressure due to rising fuel and operational costs.

Role of APTEL and Legal Background

The tariff determination process was influenced by proceedings before the Appellate Tribunal for Electricity (APTEL).

In Appeal No. 336 of 2025, filed by PSPCL, APTEL:

• Confirmed that PSERC has jurisdiction to determine tariff
• Directed both parties to approach PSERC for fresh tariff determination

Following these directions, PSERC issued the current order. However, the matter is not fully closed yet.

Is the Order Final?

While the tariff has been determined, it is subject to acceptance by both parties before APTEL.

DEE Development Engineers has stated that:

• The company is currently evaluating the order
• It may take appropriate legal steps, including filing an appeal, if required

This means that while the tariff revision is positive, there remains a degree of regulatory uncertainty until final acceptance.

Importance of Biomass Energy in India

The development also highlights the growing importance of biomass energy in India’s renewable energy mix.

Biomass power plants:

• Use agricultural residues and organic waste
• Help reduce stubble burning and pollution
• Provide steady and dispatchable power, unlike solar and wind

However, they also face challenges such as:

• Fluctuating fuel costs
• Supply chain constraints
• Maintenance expenses

Therefore, fair tariff determination is crucial for ensuring long-term viability of such projects.

Strategic Importance for DEE Development Engineers

For DEE Development Engineers Limited, this tariff revision offers several strategic benefits:

1. Improved Revenue Visibility

The higher tariff ensures better cash flow predictability over the extended project life.

2. Strengthening Renewable Portfolio

The company strengthens its presence in the renewable energy sector, aligning with India’s clean energy goals.

3. Enhanced Subsidiary Performance

Malwa Power’s improved earnings will contribute positively to the consolidated financial performance of the company.

4. Investor Confidence

Such regulatory approvals signal stability and growth potential, which can improve investor sentiment.

Financial and Operational Outlook

With the revised tariff in place, the biomass project is expected to:

• Generate higher margins
• Maintain operational efficiency
• Continue contributing to the company’s long-term growth strategy

The 5% annual escalation in variable tariff further ensures that the project remains protected against inflationary pressures, especially in fuel procurement.

Risks and Considerations

Despite the positive outlook, certain risks remain:

• Regulatory Risk: Final acceptance by APTEL is pending
• Fuel Cost Volatility: Biomass prices can fluctuate
• Policy Changes: Future regulatory shifts may impact tariffs

However, the current order provides a strong foundation for sustained operations.

About DEE Development Engineers Limited

DEE Development Engineers Limited is a well-established engineering company engaged in design, manufacturing, and supply of piping solutions and engineering services.

The company also has exposure to the energy sector, including renewable projects like biomass power. Its diversified business model helps it maintain stable growth across sectors.

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