The Maharashtra Electricity Regulatory Commission (MERC) has directed the Maharashtra State Electricity Distribution Company (MSEDCL) to refund ₹14.3 million (~$171,600) to a wind power generator in excess wheeling and transmission charges levied between April 2016 and May 2023.

The Commission instructed MSEDCL to pay interest on the refunded amount per the Reserve Bank of India’s bank rate.

It also directed MSEDCL to refund ₹4.51 million (~$54,240) in excess penalties imposed on the wind generator for demand violations in April 2016 and February 2017, along with applicable interest.

MSEDCL was ordered to complete the refunds and pay interest within one month of the ruling.

Background

Sahyadri Industries, a wind power generator and partial open-access consumer, filed a petition against MSEDCL, claiming it had been incorrectly billed wheeling and transmission charges based on power generation rather than the energy consumed at the consumption point. It argued that this practice violated the Distributed Open Access Regulations, 2016, which requires charges to be levied based on energy drawn at the consumer end.

The petitioner also sought a refund for excess penalties of ₹4.51 million (~$54,240) imposed by MSEDCL on its Chinchwad project for failing to meet maximum demand requirements in April 2016 and February 2017 despite the project meeting the threshold.

MSEDCL had failed to reimburse Sahyadri Industries despite regulatory directions issued in March 2017 and subsequent orders mandating refunds.

The petitioner claimed over ₹5.69 million (~$68,380), including the refund for the charges and interest.

It also highlighted discriminatory practices by MSEDCL, claiming the distribution company selectively issued refunds only to consumers who approached the Commission.

MSEDCL argued that the claims before December 8, 2020, were time-barred under the Limitation Act, 1963. It submitted that it had already refunded undisputed amounts of ₹4.52 million (~$54,270) and ₹262,000 (~$3,145) to Sahyadri in November 2024.

Commission’s Analysis

The Commission rejected MSEDCL’s argument that claims before December 8, 2020, were time-barred, citing the principle of continuing cause of action. It emphasized that incorrect billing practices constituted an ongoing wrong, entitling Sahyadri Industries to a refund from April 2016.

MERC noted that MSEDCL had incorrectly applied wheeling and transmission charges under the open access regulations. It also criticized MSEDCL’s discriminatory practice of issuing refunds only to consumers who approached the Commission while neglecting others with similar claims.

The Commission observed that MSEDCL had imposed penalties unjustifiably despite Sahyadri maintaining the required maximum demand in April 2016 and February 2017. Per the regulations, penalties apply only when the maximum demand falls below 70% of the threshold for two consecutive months.

It directed MSEDCL to pay interest on the refunded amounts per RBI’s bank rate.

Earlier this year, MERC approved MSEDCL’s proposed tariff of ₹3.60 (~$0.042)/kWh to procure 13 MW of wind-solar hybrid power for 25 years.

In October 2024, MERC approved MSEDCL’s plea to procure 1,468 MW of Firm and Dispatchable Renewable Energy from SJVN at a tariff of ₹4.45 (~$0.0529) and ₹4.46 (~$0.0531)/kWh.

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