Maharashtra Defers Levying State Periphery Charges on Renewable Generators

The Maharashtra Electricity Regulatory Commission (MERC) has accepted the recommendations of the deviation settlement mechanism (DSM) working group and deferred the levy of state periphery charges until further notice. The MERC said that the state periphery charges already collected from renewable generators by the Maharashtra State Load Dispatch Center (MSLDC) from January 6, 2020, to April 27, 2020, should be adjusted toward the future payment of pooling substation charges of the respective renewable generators.

The Commission further added that the implementation of the Forecasting and Scheduling Regulations was in the overall interest of the state’s power sector. It directed the DSM working group to monitor the implementation of the MERC (Deviation Settlement Mechanism and Related Matters) Regulations.

The state regulator said that the working group should analyze the DSM bills for six months after commercial implementation of the DSM Regulations for providing suggestions on the modality of determining the periphery charges.


The  Forecasting and Scheduling Regulations, 2018, came into force on January 06, 2020. After the implementation of the regulations, 28 developers approached the Commission with separate petitions, wherein they requested the Commission to give an extra trial period for implementing the regulations. The Commission rejected the appeals of all 28 petitioners seeking a trial or grace period to assess the challenges faced while complying with the provisions of the regulations.

Some renewable power generators even approached the Bombay High Court, challenging the regulations on the state periphery charges.

Later, the Commission directed the DSM working group (formed to address the difficulties in implementing the DSM Regulations) to take up the computation of the state periphery charges.

The DSM working group, in its analysis, said that the state had to pay ₹14.5 million (~$192,795) to the regional pool, whereas the renewable energy generators had to pay ₹698.8 million (~$9.29 million) as pooling substation and state periphery charges. The DSM working group concluded that for all 19,488 time-blocks of 29 weeks analysis period starting from January 6 to July 26, 2020, MSLDC has calculated state periphery charges in line with the Forecasting and Scheduling Regulations.

Commission’s Analysis

After examining the facts, the Commission said that MSLDC computed the impact of the deviation of solar and wind energy generation and its contribution to the deviation charges at the state periphery. MSLDC computed the state periphery charges in line with the regulations and was aligned with the methodology stipulated in the DSM procedure that the DSM working group verified.

The regulator noted that the deviation data for the intrastate generators and the distribution licensees was not available. Had the said data been available, the deviation impact of renewable energy generators could have been distinguishable from the deviation impact of conventional generators and the distribution licensees.

The Commission observed that the grid discipline needed to be enforced so that the defaulters were made responsible for the deviations. This applied equally to the conventional generators, distribution licensees, and open access consumers. “It is thus necessary to continue to study the impact for a longer period. Hence, such deferment of the periphery charges shall be continued until further directions of the Commission in the matter,” the Commission said.

The Commission further noted that the renewable energy generators would gain experience with time, and the forecasting accuracy would improve further.

In July last year, MSLDC had written to qualified coordinating agencies in the state, asking them to pay their bills for renewable energy deviation settlement mechanisms for January and February 2020.

Earlier, MERC had rescheduled the implementation of its DSM Regulations from June 1, 2020, to October 5, 2020, due to the Covid-19 and cyclone Amphan crises.

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