MERC Orders Refund, Bars MSEDCL from Levying Wheeling Charges on Open Access Power

The Maharashtra Electricity Regulatory Commission (MERC) has ruled in favour of open access consumers, directing Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) to stop levying wheeling charges and losses in cases where power is sourced through the state transmission network and not the distribution system.

The petitions were filed by M/s Saarloha Advanced Materials Pvt. Ltd., M/s CIE Automotive India Ltd., and M/s Mahindra and Mahindra Ltd., whose captive solar power projects are connected directly to the Maharashtra State Electricity Transmission Company Ltd. (MSETCL) grid. The petitioners argued that since their power evacuation bypassed MSEDCL’s distribution system, the wheeling charges and losses imposed by MSEDCL were unjustified.

The petitioners cited prior MERC rulings and legal precedents, including the APTEL judgment in Steel Furnace Association v. PSERC (2014), as well as Regulation 14.6(b) of the 2019 DOA Amendment Regulations, which explicitly exempts wheeling charges for transmission-connected consumers. They demanded refunds of INR 1.91 crore (Saarloha), INR 3.19 crore (CIE Automotive), and INR 3.15 crore (Mahindra & Mahindra) for charges paid during FY 2023–24.

In its defence, MSEDCL claimed that the use of services such as metering, banking, and start-up power constituted usage of the distribution system. It referred to the definition of 'associated facilities' under Section 2(19) of the Electricity Act and cited the Supreme Court's judgment in Transmission Corp. of Andhra Pradesh v. Rain Calcining (2021) to support its position.

However, MERC rejected these claims, clarifying that auxiliary supply does not convert generators into consumers under the Electricity Act. It emphasised that transmission-connected projects do not fall under the scope of wheeling charges, as reinforced by the Statement of Reasons in the 2019 amendment to the DOA Regulations. MERC also noted its dismissal of similar review petitions by MSEDCL in Case Nos. 79 and 80 of 2024.

The Commission ordered MSEDCL to refund INR 3.62 crore to Saarloha, INR 6.74 crore to CIE Automotive, and INR 11.68 crore to Mahindra & Mahindra, all with 18 percent annual interest. Additionally, energy units earlier deducted as wheeling losses, such as 26.29 lakh units in Saarloha’s case, must be credited in the upcoming billing cycle. The Commission also barred MSEDCL from levying such charges on similarly placed consumers.

Earlier, in November 2024, MSEDCL had deposited an INR 1 lakh penalty for non-compliance with previous orders. While some partial refunds were processed during proceedings, MERC has now mandated full compliance and a status report within 30 days.

The order is seen as a major win for industrial consumers and solar power generators in Maharashtra, reaffirming that transmission-linked open access projects are exempt from wheeling charges. It is expected to boost investor confidence and accelerate clean energy adoption across the state.