The Maharashtra Electricity Regulatory Commission (MERC) has directed Maharashtra State Electricity Distribution Company (MSEDCL) to refund the energy wheeling charges to three solar developers, holding that there was no merit in MSEDCL’s claim that the 33 kV line is part of its distribution system.

Background

Three open-access consumers and solar generators had filed cases under the Electricity Act 2003 challenging the levy of wheeling charges by MSEDCL on its captive open-access transactions.

The petitioners in the first case were CIE Automotive India and Sunburn Renewables. The petitioners in the second were CIE Automotive India and Strongsun Solar, and the petitioners in the third case were Bekaert Industries and Greenzest Sun Park.

The respondent in each of the cases was MSEDCL.

The developers sought temporary instructions to refrain MSEDCL from imposing wheeling charges on their open-access transactions in upcoming bills until their main petitions were resolved.

In the first case, the requested actions were to declare the imposition of wheeling charges by MSEDCL on the power supply from Sunburn Renewables to CIE Automative as illegal. Sunburn sought a refund of wheeling charges of  ₹2.01 million (~$24,267.7) and payment of interest at a rate of 12% on the refunded amounts.

In the second case, Sunburn sought a refund of ₹3.15 million (~$37,957.9) in wheeling charges.

In the third case, the prayer was for a refund of ₹2.48 million (~$29,998.35) in wheeling charges imposed on Sunburn by MSEDCL.

The petitioners submitted that CIE Automotive is a consumer located in Chakan, TalKhed district in Pune, drawing electricity at 132 kV. Sunburn Renewable operates 4.29 MW and 12.8 MW solar generating stations in Rawankola, Jalkot district in Latur. CIE holds 26.12% equity in the project and consumes all electricity generated, meeting captive consumption rules.

CIE’s premises connect directly to MSETCL’s 132 kV transmission network, avoiding MSEDCL’s distribution network (33 kV or lower). Sunburn injects power directly into MSETCL’s transmission network at the Jalkot substation through a dedicated line.

For open access supply, permission is granted from the Jalkot substation. CIE Automotive obtained short-term open access (STOA) for the 4 MW project and long-term open access (LTOA) for the 12.8 MW project. The injecting voltage for the latter is at EHV (132 kV).

No wheeling charges or losses are applicable as the entire network up to the Jalkot substation is dedicated and not part of MSEDCL’s distribution network. MSEDCL demanded an undertaking for STOA, delayed processing, and later levied wheeling charges, contrary to regulations.

The petitioner contended that since no part of MSEDCL’s distribution system is used, wheeling charges should not apply. Regulations support exemption for direct transmission connections.

MSEDCL argued that the letters and permissions indicated MSEDCL’s association with the 33 kV line, considering it as an associated distribution facility. MSEDCL contended that the 33 kV line was used for start-up power and open access permission to the generator, and thus, the generator does not comply with the DOA First Amendment Regulations, 2019.

MSEDCL argued that the 33 kV line is part of its infrastructure, making wheeling charges applicable.

Commission’s Analysis

The Commission acknowledged that the contentions and requests presented in all three cases share similarities, except for the specific location of the open-access consumer and solar generator, the duration of open access, and the amount of wheeling charges imposed by MSEDCL.

During the proceedings, the Commission issued a common order in December 2023 on similar issues in other cases. The order emphasized that MSEDCL is not entitled to levy wheeling charges when its distribution system is not used.

The Commission, therefore, directed MSEDCL to refund the wheeling charges, stating that it does not find merit in MSEDCL’s claim that the 33 kV line is part of its distribution system. The order also highlighted that wheeling charges are payable only when the distribution.

MERC recently directed MSEDCL to release the performance bank guarantees of solar developers ACME Sikar Solar and ReNew Dinkar Urja upon the termination of their power purchase agreements, failing the power evacuation set up by state entities.

Recently, MERC directed MSEDCL to compensate Juniper Green Field with ₹406.44 million ($4.92 million) for increased Basic Customs Duty on solar inverters and higher GST on renewable energy devices.

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