Maharashtra Regulator on Additional Open Access Power Over Contracted Demand

The Maharashtra Electricity Regulatory Commission (MERC) has rejected a wind power developer’s petition contesting the Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) decision to reject open access to its customers.

The consumers had applied for additional power over the contracted demand. On this, the Commission ruled that distribution licensees can only allow it only if the resultant power flow could be accommodated in the existing distribution system.

Background: 

AMJ Land Holdings had filed a petition stating that its consumers were wrongly denied permission to obtain open access power from its wind power projects in the state.


The 4.6 MW of wind projects are located at Satara and Sangli in the state of Maharashtra. The company sought the Commission’s directions to MSEDCL to grant open access to the extent sought by its consumers Jehangir Hospital and Pudumjee Paper Products Limited.

The petitioner explained that MSEDCL had granted medium-term open access permissions for 1.25 MW of wind power to Jehangir Hospital from April 1, 2016, to March 31, 2017. It also approved its application for short-term open access for December 2017 for an additional 1.25 MW of power from the petitioner’s projects.

However, the DISCOM rejected the hospital’s application for 1.25 MW of power through short-term open access for January 2017, citing that it was already availing medium-term open access for 1.25 MW and that the date was not specified in the short-term application.

The petitioner noted that it had also applied for short-term open access for the same capacity for February 2017, which was accepted. It argued that the grounds on which January’s application was rejected was arbitrary.

Another consumer submitted a short-term application for 5 MW of power from a conventional source through open access in May 2017. However, only 1.4 MW of this was approved. It went on to explain that Pudumjee Paper Products had also asked for medium-term open access in January 2017 for 2.1 MW of open access power from its projects between May 2017 to March 2018, but this was not granted by the MSEDCL, either.

The petition, citing these examples, argued that MSEDCL arbitrarily rejected open access applications on its “whims and fancies” without a valid ground. It sought the Commission to direct MSEDCL to grant open access to the extent sought by Jehangir Hospital. The company also expected compensation in the form of credit notes or payment at the preferential tariff from the MSEDCL for the unadjusted power injected into the grid in January and May of 2017.

Commission’s Stand: 

Upon analysis, the Commission said that short-term open access could only be allowed if the final power flow can be accommodated in the existing system as per the provisions of its Distribution Open Access regulations.

It cited practice directions from October 2016, which stated that if a consumer does not revise their contract demand with the distribution licensee, it may be assumed that it seeks open access over and above the contracted demand. In this case, the distribution licensee can allow any excess open access power if the existing distribution system can accommodate the resultant power flow.

The Commission also noted that the resultant power flow has to be examined for each application on an individual basis to see if it can be accommodated in the distribution system for each particular month or period. It said that these need not necessarily be based on open access granted for previous months.

The MERC opined that the rejection of Jehangir Hospital’s application for January 2017 was appropriate on account of the issues caused by the resultant power flow and the date not being mentioned in the application.

It went on to state that the Pudumjee Paper Product’s application for May 2017 was also restricted as the distribution system could not accommodate the resultant power flow as per the MSEDLC’s calculations.

Having said this, the Commission went on to say that licensees can grant short or medium-term open access if the resultant power flow is higher than what the system can accommodate and that they can inform the applicant of any upgrades that the system may require. In this regard, it observed that the annual banking facility for renewable generators is not being used ideally to the extent that it could be under this provision.

It noted that consumers sought more open access power than their contracted capacities as the capacity utilization factor (CUF) of renewable energy generators is very low and that higher generation capacity is required for meeting energy needs. It said that contracting renewable capacity at multiple times of the consumer load would be a deterrent to the stability of the grid and the quality of the power.

It concluded, stating that since the MSEDCL did not technically delay the medium-term open access, there was no need to issue any direction to it for doing so. With this, the Commission dismissed the petition.

In April, the Maharashtra Electricity Regulatory Commission announced various charges payable by open access consumers for the financial year 2020-21 to 2024-25. The MSEDCL said that consumers were buying a considerable amount of power under open access, and on the other hand, it has tied up a sufficient amount of power to meet the expected demand by considering the overall growth in the state.

Previously, MERC had issued a common order for five petitions filed because of a dispute regarding the denial of short and medium-term open access by MSEDCL citing the non-installation of individual special energy meters for their captive windmills.

Read all about India’s open access segment for solar power here.

 

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