DEE Development Engineers Limited has informed the Exchange regarding a press release dated May 22, 2025, titled "Order by Punjab State Electricity Regulatory Commission (PSERC) for Tariff Re-determination of Biomass Power Plants of the Company".
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The Punjab State Electricity Regulatory Commission (PSERC) has issued orders affecting DEE Development's two biomass power plants. For the 8 MW Abohar plant, the tariff was cut from ₹7.47 to ₹5.42 per unit, retrospective to January 1, 2024, triggering a ₹15.53 crore recovery demand from PSPCL and an estimated ₹12.5 crore annual revenue loss. For the 6 MW Muktsar plant (run via subsidiary Malwa Power), the PPA expired on April 27, 2025, and PSERC's interim order allows operations only at a provisional ₹3.50 per unit (vs prior ₹8.59), implying a ~₹26 crore annual revenue hit. Combined, the two plants generated roughly ₹82 crore revenue and ~₹13.5 crore PBT in FY24. The company has filed a review petition and plans a Board meeting to explore legal recourse, private-sector PPAs, and a feasibility study to repurpose biomass assets for green hydrogen production.
Near-term negative: lower tariffs and retrospective recovery could materially compress earnings and cash flow from the biomass segment, which is a meaningful contributor to the company's bottom line. Watch for the Board's strategic response and outcome of the review petition / next hearing on May 28, 2025, as these will determine whether the impact is temporary or structural.