Sourcing Power from Multiple Generators for Open Access not Permissible

The Maharashtra Electricity Regulatory Commission (MERC) has dismissed a petition filed by G.I. Energies (GIE) against the Maharashtra State Electricity Distribution Company Limited (MSEDCL) for not signing the energy purchase agreement (EPA) for the purchase of power at a preferential tariff for long term basis.

G.I Energies, in its petition, mentioned that it had applied to MSEDCL  to grant open access for third party consumption. However, MSEDCL denied the permission to GIE, citing a revision of the guidelines for granting open access.

After being denied the permission, GIE wrote to MSEDCL again, expressing its interest to enter into an agreement with MSEDCL for the long-term sale of power and offered to sell power to MSEDCL at preferential tariff.

After making the offer to MSEDCL, GIE received a communication from MERC that directed MSEDCL to process its application to grant open access. Therefore, GIC once again requested MSEDCL to grant open access, while withdrawing the offer for the long-term sale of power.

But MSEDCL once again rejected granting the permission to GIE. In its order, MSEDCL said, “The MERC (Distribution Open Access) Regulations, 2005 provide for open access from a (one) generating company only. It is to inform that open access permission for sourcing power from multiple generators cannot be granted.”

GIE in its reply said that regulations do not bar an open access consumer from purchasing wind power from multiple generators. The option rests with the consumer as to whether supply is to be availed from one single generator or multiple generators, unless there is a specific provision disallowing the open access through more than one source.

After the denial of open access for the second time, GIE opted to revive the proposal for the long-term sale of power to MSEDCL and enquired about the applicable tariff. Subsequently, it expressed its interest to sell power to MSEDCL under a long-term EPA. MSEDCL then informed GIE that the competent authority had accepted its proposal and requested GIE to submit the draft EPA along with documents in a timely manner.

After the consent for the execution of long term EPA, GIE injected power into the grid of MSEDCL.  However, MSEDCL then cancelled the offer for the EPA.

In its plea, GIE also said that MSEDCL has enjoyed the wind power fed into the grid, sold it to its consumers and realized the revenue for the energy injected by GIE during this time.

MSEDCL, however, denied the submission and allegation of GIE. It said that GIE never submitted the draft EPA along with all relevant documents to the office per the required format. Therefore, MSEDCL again cancelled the offer for long term EPA, as there was no executable contract with GIE in place.

MSEDCL stated the energy injected by GIE was without any valid contract or permission, so no payment can be made for the injected power. Additionally, MSEDCL claimed GIE injected unauthorised energy into the system and polluted its power grid by destabilizing the system.

In its ruling, MERC stated that MSEDCL’s denial of open access permissions to GIE on two occasions cannot be grounds for GIE to seek direction against MSEDCL for signing a long-term EPA.

Regarding the proposed long-term EPA between GIE and MSEDCL, MERC noted that GIE did not submit the relevant documents and therefore no valid EPA materialized between MSEDCL and GIE at any stage.

Recently, another ruling by MERC clarified that generators cannot use both open access and net metering simultaneously. The commission also reiterated that benefits of net-metering are limited to rooftop solar installations of only up to 1 MW. For generators who have project capacities of 1 MW and above, open access is the way to go. MERC was responding to a petition filed by CleanMax Solar to grant net metering permission for a 991 kW rooftop solar photovoltaic (PV) project at Asahi India Glass Limited (Asahi) situated at MIDC- Taloja, Raigad, Maharashtra.

In yet another ruling passed a few weeks ago, MERC clarified that the nodal agency will grant medium-term open access (MTOA) or short-term open access (STOA) in the existing distribution system only if it can accommodate the resultant power flow.

Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer