The Maharashtra Electricity Regulatory Commission (MERC) has asked a wind generator to await the decision of the Appellate Tribunal for Electricity (APTEL) after the state distribution company did not comply with its order for compensation for the financial year (FY) 2014-17.

Background

WinIndia Ventures Private Limited filed a petition with MERC seeking intervention in directing the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to pay for the wind power supplied to the grid for the financial year (FY) 2014-17 along with an interest rate of 18% for each day of delay in compliance of the order dated July 03, 2020. It had also requested the Commission to take appropriate action against MSEDCL for non-compliance with the order.

In its order dated July 03, 2020, the Commission had stated:

“MSEDCL is directed to compensate WinIndia Ventures Private Limited for the energy injected from 1.5 MW wind project during the period from FY 2014-15 to FY 2016-17, which has already been considered by it for the fulfillment of non-solar RPO targets. Such compensation would be without any carrying cost.”

WinIndia Ventures, in its submission, said that MSEDCL has, to date, not complied with the order, which makes it liable to pay interest at 18% on the outstanding amount. The wind generator had requested MSEDCL to pay the due amounts in compliance with the order through several letters. However, such requests were unheeded by MSEDCL.

The direction to pay for three years (FY 2014-2017) was based on the confirmation of MSEDCL that it had utilized the power injected by the wind generator to fulfill its renewable purchase obligation (RPO) targets.

Later, WinIndia Ventures approached the Appellate Tribunal for Electricity (APTEL) to seek relief for the DISCOM’s non-compliance, and it also challenged the earlier order of the Commission.  It challenged the very basis of the Commission’s monetary relief along with various other observations made in the order, saying that the compensation decided was on the lower side.

Commission’s Analysis

The Commission noted that WinIndia Ventures had only partly challenged the order before APTEL. It had filed the appeal before APTEL seeking the enhancement of what had already been granted by the Commission, particularly for enhancing the compensation for three years (FY 2014 to FY 2017) until May 28, 2020, at the preferential tariff and carrying cost.

The state regulator added that it was noticeably clear that in the appeal before APTEL, the generator had challenged the very basis on which the compensation was allowed by the Commission in its earlier order.

Further, after filing an appeal before APTEL challenging the very basis of the compensation, WinIndia Ventures continued to be in touch with MSEDCL to pay compensation.

“These communications reveal that although WinIndia Ventures sought payment of compensation from MSEDCL as per the order of the Commission, it had not raised any invoice for the same. This might be because it is waiting for MSEDCL to provide the calculations. One cannot deny the

responsibility of MSEDCL to share the computation as it had fairly accepted that such energy had been used by it. But at the same time, WinIndia Ventures, which is a generator in the present case, must be well aware of the energy injected by it during that period and hence it would have easily raised the invoice for the same,” the Commission added.

The Commission noted that MSEDCL had also challenged the order granting compensation to the generator. It had argued that there was no energy purchase agreement (EPA), and the energy injected without EPA does not warrant any compensation.

Considering all the facts, the Commission asked both the parties to wait until APTEL’s order.  

Last month, the state approved the energy purchase agreement for wind projects with expired EPAs. The Commission approved the procurement of power at ₹2.25 (~$0.03)/kWh for the Group I projects and ₹2.52 (~$0.034)/kWh for Group II and III projects. Group I projects are those commissioned before December 27, 1999. Group II is for projects commissioned after December 27, 1999, to December 31, 2003, and Group III projects are those that are commissioned after April 1, 2003.

In August this year, MERC directed MSEDCL to reconcile differences in its outstanding dues with wind generators in the state and to pay them the total amount due along with late payment charges.

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Image credit: Photo by Karsten Würth on Unsplash