MERC denies Cleanmax’s plea to use Open Access and Net metering simultaneously

In a petition filed by Cleanmax Enviro Energy Solutions Pvt. Ltd., the organization had sought clarification regarding the net metering arrangements for Open Access consumers under the MERC regulations 2015 from the commission. As a part of the reply to the petition, according to the ruling by MERC, the generators cannot use both Open Access and net metering simultaneously. The regulatory commission also mentioned that benefits of net-metering are limited to the rooftop solar installations with capacity up to 1 MW only. The generators above 1 MW can avail Open Access.

The explanatory ruling came as a result of 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 situated at MIDC – Taloja, Raigad Maharashtra. Asahi was a customer of MSEDCL with a contract demand of 7500 kVA connected at 100 kV. Asahi also availed partial open access at 3,000 kVA from traditional energy under a group captive arrangement from Sai Wardha Power Generation Limited. In 2017, Asahi made an application for Net Metering arrangement for the Rooftop Solar Photovoltaic system under the rooftop solar regulations 2015.

After listening to both the party’s petition the commission came to a decision that…

“Net metering and Open Access are two different sets of arrangements for different eligible consumers and its Regulatory framework also has been provided by the two different Regulations. If these two arrangements are mixed up then there are various issues related to Grid security, accounting, billing, settlement etc. Hence, the Commission has made Net Metering Regulations for “below 1 MW” and Open Access for “1 MW and above” and cannot avail simultaneously by same consumer”.

Hence denying Cleanmax’s plea.

One of the reasons for the commission to take this decision was their concern for grid security due to which the DISCOMs would have to go into distribution network contingencies and other related issues to Open Access and Net Metering Simultaneously.

TARIFF OF RS 2.85 DETERMINED AT THE LATEST WIND AUCTION

In an auction conducted by Maharashtra State Electricity Distribution Company Limited (MSEDCL) for a 500 MW grid connected wind project, the lowest tariff quoted was Rs 2.85/kWh.

This tariff was quoted  by Adani Green Energy and KCT Renewable Energy Private Limited to develop wind projects of 75 MW each. Wind tariff  determined through auctions not gone above Rs 3/unit since the dip in SECIs second wind tariff auction in the month of September last year.

 

Maharashtra: RPO Compliance and target for 2015-16

The Maharashtra Energy Development Authority submitted the RPO settlement data for MSEDCL on 14th September, 2014. There have been major shortfalls in meeting RPO targets. As for the total RPO targets set, a comparison below shows that MEDA had exceeded the NAPCC expectations in RPO for states.

The status of achievement of RPO targets by MSEDCL, based on the revised details provided by MEDA, MSEDCL and MSLDC for FY 2010-11 to FY 2013-14 are depicted in the graphs below.

Regarding Solar RPO targets, the Commission has allowed MSEDCL to cumulatively fulfil its Solar RPO targets by FY 2015-16. The Commission observed that MSEDCL has shortfall of 684.89 MU for FY 2012-13 in meeting their Non-Solar RPO targets. After considering the surplus of 386.52 MU of previous years, there is still a shortfall of 298.37 MU in FY 2012-13. Thus MSEDCL was allowed to meet its Non-Solar RPO shortfall of 298.37 MU for FY 2012-13 in FY 2013-14 on cumulative basis. The shortfall in Hydro should also be fulfilled by 2015-16.

MSEDCL was directed by commission to constitute a separate ‘RPO Regulatory Charges Fund’, to purchase Solar and Non-Solar RECs and/or to procure power, to meet the shortfall against RPO targets by the end of March, 2016.

The relevant order can be accessed here.

 


MERC Reduces MSEDCL distribution Tariff

The Maharashtra Regulatory Commission (MERC) in a notification dated June 27, 2015, has calculated the Distribution Tariff for Maharashtra State Electricity Distribution Company Limited (MSEDCL), which will be effective from 1st June 2015 onwards.

The commission in the present order has surprisingly reduce the tariffs for Industrial and commercial consumers. The details of the tariff for commercial and Industrial consumer are in the table below:

A graph on category-wise reduction in tariff is below:

The Commission has approved Wheeling Charges for 33 kV, 22/11 kV and LT Level as Rs. 0.15 per kWh, Rs. 0.83 per kWh and Rs. 1.42 per kWh respectively.

The reduction in the tariff for HT industrial consumer is surprisingly substantial, which is in the range of 11-17%, and the same for HT commercial consumer has been reduced by 10-11%. This reduction in tariff will have a considerable effect on the Open access market.

The Significant reduction in tariff for industrial and consumer tariff has been given after various industrial and commercial consumers expressed their views that the tariffs for industrial and commercial consumers are higher in Maharashtra in comparison with neighboring States.

The commission in the order has also stated that as it has been observed that the current formula for CSS has been a major hurdle for the consumer wishing to avail Open Access, so current formula for CSS will be amended and the commission will deviate from current formula. CSS reduction will open new doors for open access, but it to be seen whether the revision in CSS will have positive impact on OA or not.

The order can be accessed here.

MERC Allows Solar Open Access in Maharashtra

MERC (Maharashtra Electricity Regulatory Commission) through an order on 6thMay 2014, has allowed Open Access for the Solar Power in Maharashtra.

The order has come in response of a petition filed by GEA (Green Energy Association – an association whose members are investors in Solar REC space), wherein GEA has requested MERC to direct MSEDCL to issue the Open Access permissions to the solar power generators of the state and also to issue credit notes for the energy injected by the solar generators into the system till date.

The Regulatory Commission said that petition filed by GEA stands disposed of, citing the reason that MSEDCL cannot be partial towards any particular RE Source, and it has already granted Solar OA permission to BEST in Mumbai.

However the Commission has directed MSEDCL to allow the Open Access through solar generator as single source only, as Distribution OA through multi source is in the process of amendment. The Commission also directed MSEDCL to continue the procedures followed for allowing Open Access permissions through RE generators during previous financial year, and to issue all pending credit notes till date.

The detailed MERC order can be accessed here

Our previous blog on MERC RE Tariff can be read here

Maharashtra (MSEDCL) Wind Energy Policy, 2014

Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) has come up with its wind energy policy in consultation with the MEDA (Maharashtra Energy Development Agency) in order to promote the wind energy generation in the state. The policy was notified on 3rd June, 2014, and will be applicable on projects commissioned in FY 2014-15 and onwards.

This can be taken as a positive step by MSEDCL towards RPO compliance. Under the PPA, the entire power produced will be sold to MSEDCL.

In our opinion, since power is to be sold at tariff determined under PPA with MSEDCL, therefore the projects cannot avail REC’s.

MSEDCL has also set up time limits for connectivity permission as given below:


Processing Fee –
The wind power developer has to submit a non-refundable processing fee of Rs. 1.00 Lac per MW of grid connectivity.Extension of 6 months shall be granted on valid grounds as per directives of MSEDCL. If the generator fails to commission the project within extended period, they will have to re-apply for grid connectivity.

Security Deposit – The wind project developer has to submit a Performance Bank Guarantee of Rs. 5.00 Lacs per MW for sanction of gird connectivity, towards security deposit.

Wind Power Scheduling – It is mandatory for the generator to forecast and schedule the power produced, as per CERC guidelines.

More details on the order can be read here.

Maharashtra revises procedures for Wind Open Access

Keys points on Revised Procedure for Wind Open Access in Maharashtra:

1.i) For wind open access application process the documents required would be:

  • Last 3 months energy bills
  • Consent letter from the wind generator
  • Last 3 months generation credit note
  • Declaration regarding installation of SEM at both ends
  • Last open access permission of consumer / generator
  • OA through trader, copy of valid Trading License and MoU between the trader & consumer/generator
  • For Captive use, Chartered Accountant’s certificate regarding 100% ownership of the wind power project or Equity share holding and undertaking regarding more than 51 % self-consumption

ii) Complete open access application to be submitted well in advance i.e. preferably 30 days prior to the date of commencement of open access.

iii) If an open access consumer is situated in the License area of other utility / Distribution Licensee then copy of NOC / open access permission issued by the concerned Distribution Licensee shall be submitted along with the open access application.

iv) If an open access consumer fails to achieve the Maximum Demand equal to or greater than eighty (80) per cent of the threshold level, the open access permission will be cancelled and further he shall be liable to pay, to MSEDCL, a penalty equal to two times the wheeling charges for the financial year or part thereof for which he had failed to achieve such Maximum Demand

v) If the contract demand of the open access consumer is in the range of 1000 KVA– 1500 KVA then Renewal of Open Access Permission shall be subject to use of Maximum Demand equal to or greater than eighty (80) per cent of the threshold level during previous open access period

2)Eligibility conditions:

  • An open access consumer can avail power from a Generating Company only, sourcing power from more than one / multiple generating companies will not be processed
  • Declaration in advance by OA consumer for sourcing power from other sources or generating company.
  • Open Access permission will not be granted to the consumers availing single point supply and sub distributing it further to multiple consumers. Such consumers are required to apply for Distribution Franchisee through MoU route as per relevant MERC & APTEL orders
  • The open access consumer will be entitled to seek open access for sourcing 100% power generated from a wind power project.

 3) Metering:

 Installation of Special Energy Meter (SEM) at both ends i.e. at generation end and at consumption end of wind energy shall be mandatory to seek open access.

4) Energy Accounting & Billing:

  • Joint Meter Reading (JMR), the monthly Generation Credit Notes (GCN) will be issued by the field office in due course of time
  • The open access consumer/ generator shall arrange to pay the requisite open access charges (Wheeling charges, transmission charges, operating charges, charges for import of energy & KVARH charges) and collect the monthly GCN from field office regularly
  • Late fees of Rs. 5000/- will be recovered if the GCN is collected one month later than JMR. Similarly, late fees of Rs. 6000/- will be applicable for issuance of GCN after 2 months from JMR.
  • The GCN shall not be issued after 3 months from the Joint Meter Reading and the energy corresponding to the GCN shall be treated as lapsed
  • The field office, where the open access consumer is situated, will give corresponding TOD time slot – wise credit adjustment in the monthly energy bills of the open access consumer.
  • Open access consumer has to pay CSS charges for third party sale, CSS not applicable for captive.

5) Banking:

MSEDCL, for the time being, has decided to provide the banking facility in part i.e. the wind generation units will be allowed to get carried forward for getting adjusted in next energy bills if could not be adjusted in same month till the end of that financial year, but the surplus units, if any, at the end of financial year will not be purchased by MSEDCL.

6) Change of option not permitted during validity period:

OA consumer will be permitted only to change the option from open access to Sale to MSEDCL during the validity period of open access permission, no other option allowed.

7) Wind energy injected into the grid during the intervening period for which OA permission could not be granted due to late submission of OA application or change of option by wind open access generator from open access to Sale to MSEDCL during the validity period of open access permission, will be purchased by MSEDCL at MERC tariff rate from the wind generators.

  • Gr I: 10 % less than that of GR.II MERC rate of Rs. 2.52 per unit
  • Gr II: Rs. 2.52 per unit.
  • Gr III: As per MERC order dated 24.11.2003
  • Gr IV: Will not be purchased, wind energy will be treated as lapse.

Contributed by – Nishesh Pandit

Pass RE cost to Industries says MSEDCL

Maharashtra state electricity distribution company limited (MSEDCL) has requested the Hon’ble MERC to consider passing on the cost due to renewable energy purchase to Industries of the state. As per MSEDCL, Industries in the state are responsible for pollution and climate change and consequently they should be burdened with higher purchase cost of RE, not common consumers.

MSEDCL has provided the average cost of RE power purchase to be : Rs. 3.81 per unit, Rs 4.12 per unit, Rs. 4.26 per unit & Rs. 4.32 per unit for FY11 to FY13 respectively. Based on this MSEDCL has requested to segregate the RE power purchase from the ARR so that the overall tariff gets reduced, even-though, a cursory look reveals that the %age in such increase is declining on year to year basis (8.31% to 3.3 % to 1.41 % finally for FY13).

In the form of an additional information, MSEDCL in the order has elaborated that it has met the RPO targets of FY11 and FY12 and has tied with adequate renewable capacity to meet RPO of FY14. However, it has mentioned that due to infirm nature of RE power, challenges remain in claiming the contracted capacity as RE purchase capacity.

However, in the present order Hon’ble commission has stated that burdening one category of consumers with higher tariff is a matter of tariff determination process and has held that such a decision will be appropriately taken up during tariff determination of MSEDCL.

Copy of the order.

Maharashtra Not to Allow Banking of Power to Renewable Generators

In another step back on the Open Access issue in Maharashtra, MSEDCL recently rolled back the banking provision for renewable energy generators opting for open access in the state.

A recent circular released by MSEDCL has proposed new rules for banking of power generated by renewable sources and sold under open access.

The key provisions regarding banking in the new circular are:

 

  • If energy is supplied in excess of consumption for every 15 minute time-block, such energy will lapse (will not be allowed to be banked)
  • If energy is consumed in excess of supply for every 15 minute time-block, the applicable tariff will be that of a Temporary Power connection.

 

The banking related provisions are mentioned below:

 

6.4 It is necessary that the consumer / person who so ever has opted for Open Access shall

use the entire power contracted of Open Access Generator and ensure that the

consumption of the consumer / person in every 15 minutes time block shall match with

the energy received at the drawal point during corresponding 15 minutes time blocks.

 

6.5 Whenever the consumer / person is unable to match every 15 minutes time block

consumption with the energy received at the drawal point during corresponding 15

minutes time blocks, then in such situation:

 

6.5.1 If the net energy received at the drawal point every 15 minutes time block exceeds

the net energy actually consumed during the corresponding 15 minutes time block,

the excess energy received during the said 15 minutes time block shall be treated as

lapsed and the consumer shall neither be permitted banking of such excess energy

nor shall be paid for the same, unless there is a separate agreement for banking or

sale/purchase of this over injection.

 

6.5.2 The facility of banking will be applicable in case of self use only; if permissible as per

GOM policy/ MERC Order/Regulations.

 

6.5.3 In the reverse situation, if the net energy received at the drawal point every 15

minutes time block is less than the net energy actually consumed during the

corresponding 15 minutes time block, the excess energy consumed by the consumer

/ person during the said 15 minutes time block shall be considered as over-drawal

from the Grid and shall be billed at the rate as may be applicable from time to time

for the energy charges payable by a consumer obtaining Temporary Power (for other

purposes) supply from MSEDCL. Further, in such situation, the consumer / person

shall also be liable to pay “Electricity Duty”, “Tax on Sale of Electricity”, etc. on such

excess energy consumed from the Grid.

 

This will effectively bring an end to open access by wind power producers in Maharashtra, as 60-70% of the power is produced in the ‘high season’ (roughly corresponding to monsoons). In the present scenario wind producers bank the excess energy produced in the high season, to be consumed throughout the year. If such a facility is not allowed, then wind generation in the state will not remain feasible, unless power is sold to the Discom. Note that the new rules for banking of power apply only to renewable energy generators under open access (not to captive users).

 

The second provision, under which the consumer will be charged at “temporary power’ connection rates, rather than the regular industrial connection rates will increase the cost of power substantially. (HT Industrial Tariff is Rs 5.27/unit while the Temporary Tariff is Rs 10.12/unit. See Tariff Order for details)

 

In effect, this provision will end ‘open access’ in Maharashtra for renewable energy generators.

 

 

Past articles on the Open Access issues in Maharashtra:

 

Maharashtra Cross-Subsidy Declared

The ongoing cross-subsidy issue in Maharashtra, which was also the subject of a Supreme Court judgement recently, seems to have been resolved.

MERC came out with an order on the subject on September 9.

The highlights are:

Cross-subsidy (CSS) has been determined as follows:

– MSEDCL: HT Categories – Rs 0.21 unit to Rs 3.97 per unit. (the higher amount is for temporary connections; the majority of industrial consumers will face a CSS of 21 paise to 92 paise)
– RInfra-D: HT Categories – Rs 0.26 per unit to Rs 2.79 per unit.
– TPC-D: HT Categories (Only for Temporary Consumer) – Rs 2.58 per unit to Rs 2.81 per unit.

The order further notes that open access transactions from Renewable Energy will attract a cross-subsidy of 25% of the applicable charges. (This is great news for several wind and biomass producers, who may face CSS of 5 paise to 23 paise only, as against the earlier demand by MSEDCL of 80 paise)

Another interesting point is that MERC study suggests that despite the CSS, industrial consumers stand to gain “about Rs 1.47 per unit” from open access.

The order is available here. Also see Business Standard article on the subject here.

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