The Appellate Tribunal for Electricity (APTEL) has reprimanded the Maharashtra Electricity Regulatory Commission (MERC) for failing to conduct a thorough, case-specific examination of a petitioner’s grievances and provide clear reasoning when applying precedents.

The case relates to a petition filed by engineering firm Ghatge Patil Industries (GPIL), which had approached MERC seeking an extension of the banking period to carry forward the unused power for future adjustments. It had also sought the issuance of generation credit notes for billing adjustments, a waiver of fixed demand charges during the COVID-19 lockdown, and flexibility to adjust its contract demand with Maharashtra State Electricity Distribution Company (MSEDCL).

The Maharashtra regulator had, however, refused any relief to the petitioner.

APTEL ruled that MERC had ignored GPIL’s unique circumstances, such as the COVID-19 lockdown impacts on operations, which the petitioner argued warranted special considerations like extended banking periods and credit adjustments for unused energy.

Background

GPIL has a significant electricity demand contract, supported partly by its 15 MW wind power projects in Dhule district, Maharashtra. Initially, GPIL had a wind energy power agreement with MSEDCL but, after termination in 2018, used the power generated for self-consumption under an open access arrangement.

During the COVID-19 lockdown in 2020, GPIL faced operational shutdowns and consequently could not utilize its power generation. However, it still incurred charges from MSEDCL for unused energy injected into the grid.

GPIL requested MERC to extend the time to adjust the unused power from its wind projects. It also requested that energy injected during lockdowns be credited for future billing periods and that it should be relieved from fixed charges for the lockdown duration. It sought flexibility in adjusting its contract demand with MSEDCL.

GPIL claimed the pandemic and ensuing lockdown constituted a force majeure event, warranting an extended banking period to adjust unused power. It argued that MERC’s open access regulations, allowing banking adjustments monthly, should be relaxed in light of the unforeseen operational impacts.

MSEDCL opposed these requests, referring to a prior ruling involving similar prayers from the Indian Wind Power Association. MERC upheld MSEDCL’s position and refused to extend the banking period or grant the requested relief, claiming regulatory constraints.

GPIL then appealed to APTEL, arguing that MERC’s decision did not consider the lockdown’s distinct impacts on its operations and that force majeure should apply, allowing for regulatory flexibility in adjusting the banking period and related charges.

Tribunal’s Analysis

APTEL criticized MERC’s decision by applying a previous ruling to GPIL’s case without evaluating the petitioner’s unique circumstances. According to APTEL, a regulatory body should provide individualized judgments, especially when faced with exceptional situations like the COVID-19 lockdown.

The Tribunal highlighted that MERC had overlooked proper judicial practice by not notifying GPIL of the reliance on its prior ruling.

APTEL held MERC’s approach lacked thorough examination and transparency and did not meet regulatory standards.

The appellate body nullified MERC’s ruling and directed that it reconsider GPIL’s petitions independently and issue a revised order based on a detailed analysis within two months.

The Tribunal also directed the registrar to transmit a copy of its judgment to all the Electricity Regulatory Commissions for information and compliance.

In January last year, MERC directed MSEDCL to pay ₹2.62 million (~$32,073) to GPIL as interest on delayed payment charges after GPIL sought directions against MSEDCL for recovering delayed payment charges along with the accrued interest amount against invoices generated under the energy purchase agreements.

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