The Maharashtra Electricity Regulatory Commission (MERC) has passed an order reprimanding the Maharashtra State Electricity Distribution Company Limited (MSEDCL) for not paying the interest accumulated on its principle dues to a small hydro project developer in the state.

The commission was examining a petition filed by Mahati Hydro Power Projects Private Limited seeking adjudication of its dispute with the MSEDCL. Mahati Hydro Power had asked the MERC to direct MSEDCL to do the following: Make the outstanding payment for the monthly energy bill until June 2018, to honor terms of energy procurement agreement (EPA), keep paying its dues, pay carrying cost at the rate of 15 percent per annum for the delay in payment of delay charges.

Mahati Hydro Power had entered into an EPA with MSEDCL for the sale of power from its 4 MW Sonawade small hydro project. The project is situated in village Chandoli of  Maharashtra’s Sangli district. MSEDCL had given the hydro company a letter of intent on September 21, 2010, confirming the purchase of power from the date of commissioning of the project.

After the execution of the EPA for 4 MW, Mahati raised monthly invoices for the energy generated and supplied. Though MSEDCL made payments against the principal sums for the invoices, these payments were delayed and were made after the expiry of the credit period of 60 days from the date of invoice submission.

While observing the petition and submissions made by both parties, the Maharashtra Commission observed that Mahati Hydro Power has been belatedly paid and because of such delay, some delay charges are yet to be paid by MSEDCL for the power supplied to it under the agreed EPA.

In its order, the commission also stated, “Reconciliation, wherever necessary, will be completed within two weeks from the date of this order and a reconciled report of outstanding dues along with the exact time limit by which the payment would be made in chronological order will be submitted to the commission within two working days thereafter.

According to the commission, MSEDCL should note that if it deviates from its commitment given in the plan, penal interest will accrue at 1.25 percent per month on any remaining DPC.

In November 2018, the MERC passed an order directing the Maharashtra State Electricity Transmission Co. Ltd. (MSETCL) to pay a total sum of ₹5.5 million (~ $0.075 million) to a hydro power project developer. Recently, the commission had provided relief to another small hydro project developer of a 10 MW Radhanagari small hydro power project in Maharashtra.