DISCOM Asked to Pay for Surplus Energy Injected From an Open Access Wind Project

The Maharashtra Electricity Regulatory Commission (MERC) directed Maharashtra State Electricity Distribution Company (MSEDCL) to purchase and pay Ghodawat Energy, an open access wind project developer, for the surplus energy injected from the financial year (FY) 2016-17 to FY 2019-20 within three months.

Ghodawat Energy petitioned MERC to direct MSEDCL to consider the surplus wind energy injected as per the mandated regulations and compensate with a 15% interest for the delayed payments by MSEDCL. Ghodawat Energy also asked the Commission to direct MSEDCL to submit a detailed report on the purchase of surplus energy injected since FY 2014 to date.

Background

Ghodawat Group is a wind energy generator that owns and operates multiple projects in Satara District. The power is being sold under the open access model since FY 2013-14. Despite Ghodawat raising multiple invoices, MSEDCL did not purchase surplus energy injected per the Commission’s Distribution Open Access (DOA) Regulations.


Maharashtra Details of Surplus Energy Injected by Open Access Wind Project

Ghodawat alleged that MSEDCL, a state utility expected to work on a revenue-neutral basis, has started making profits at the cost of wind generators. Ghodawat claimed that if the action of MSEDCL is not checked and if it is not restituted to the same economic position had MSEDCL followed the DOA Regulations, it would lead to a travesty of justice.

Ghodawat claimed the Principles of Restitution envisage to put the petitioners in the same economic position as they would have been had the illegality not been committed. Hence, it deserves to be compensated for the surplus energy injected with interest for delay per DOA Regulations. Ghodawat also sought interest at 15% per annum for the delay in payment by MSEDCL.

Ghodawat stated that provisions of DOA Regulations make it clear that unutilized banked energy at the end of financial year limited to 10% of total generation is considered a deemed purchase by MSEDCL. Once such energy is considered a purchase, MSEDCL must pay for it as it has sold the power to its consumers and recovered tariff accordingly.

MSEDCL stated the regulations under which the petition is filed are incorrect as the nature of the dispute is between a generator and a distribution licensee. Hence the regulation is not the right reason for moving a petition before the Commission for recovery of monetary claims, and that Limitation Act is applicable.

MSEDCL also stated that it will purchase those over-injected units within the limitation period.

Commission analysis

The Commission observed that Ghodawat Energy has to be paid for surplus units injected from FY 2016-17 to FY 2019-20. The claim is not time-barred in terms of the Supreme Court Judgment for extension of limitation period due to COVID -19 pandemic.

Hence, the Commission directed MSEDCL to purchase and pay Ghodawat Energy for the surplus wind energy injected from FY 2016-17 to FY 2019-20 within three months.

However, the Commission noted that Ghodawat Energy is not entitled to the payment of the purchase of surplus units injected by them before FY 2016-17, as this claim is time-barred.

Regarding the prayer of Ghodawat for 15% interest for the delay in payment, the Commission noted that the DOA Regulations provide that distribution licensee only needs to pay interest at a rate equivalent to the rate of the Reserve Bank of India.

According to the data released by the Ministry of Power, distribution companies in Maharashtra DISCOMs owed renewable generators ₹192.85 billion (~$2.52 billion) in overdue payments at the end of February 2022.

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