Introduction of Post-Bid Material Conditions Vitiates Competitive Bidding Process and Tariff Adoption under Section 63.

The Appellants, various energy generating and storage companies, participated in a competitive bidding process initiated by Respondent No. 2 (MSEDCL) for the procurement of 2000 MW/4000 MWh Battery Energy Storage Systems (BESS)

The Request for Selection (RfS) originally specified a 2-cycle per day operation, which was later amended via Addendum 2 to a 1-cycle per day operation (equivalent to 5,475 cycles over 15 years)

Based on this 1-cycle configuration, Appellants submitted financial bids and a lowest tariff of Rs. 1,65,998/MW/month was discovered

After bids were submitted, the Ministry of Power (MoP) issued a letter on 31.12.2025 granting Viability Gap Funding (VGF) approval subject to MSEDCL retaining a "contractual right" to use the BESS for at least 6,300 cycles without additional cost

The Commission adopted the discovered tariff in the impugned order dated 06.03.2026, ruling that the 6,300-cycle requirement was a non-mandatory contractual provision

Section 63 of the Electricity Act, 2003, regarding the adoption of tariff through a transparent process of bidding in accordance with guidelines issued by the Central Government

"the rules of the game cannot be changed after the game has started," a doctrine of administrative and tender law ensuring fairness and transparency in public procurement

VGF Scheme guidelines (dated 09.06.2025) issued by the Ministry of Power which allow distribution licensees to vary project configurations

The Tribunal found that the Appellants submitted their bids based on the 1-cycle per day (5,475 total cycles) specification in the RfS and draft Battery Energy Storage Purchase Agreement (BESPA)

The MoP letter dated 31.12.2025, which introduced the 6,300-cycle threshold, was issued after the financial bids were opened on 04.11.2025

The Tribunal rejected MSEDCL’s argument that this was merely a "right" and not an "obligation," noting that if MSEDCL incorporated this into the BESPA, it could exercise the right at any time, forcing bidders to upgrade equipment at their own cost or risk losing VGF support

The Tribunal further observed that MSEDCL's unilateral undertaking to pay VGF if the MoP denied it lacked board or regulatory approval, rendering it unenforceable

Consequently, the inclusion of a condition requiring 825 additional cycles (6,300 total) without additional compensation was a post-bid "re-arrangement of the goalposts" that prejudiced the bidders

The Tribunal set aside the Commission’s order dated 06.03.2026 and quashed the entire bidding process

MSEDCL was directed to return the security deposits and Bank Guarantees to the Appellants within four weeks