MERC Upholds Solar Generators’ Appeal, Strikes Down MSEDCL’s Wheeling Charges

In a significant ruling, the Maharashtra Electricity Regulatory Commission (MERC) has ruled in favour of solar power generators TP Solapur Saurya Ltd., TP Arya Saurya Ltd., and TP Ekadash Ltd., against Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). 

The dispute arose after MSEDCL imposed wheeling charges of approximately INR 1.54 crore and deducted wheeling losses of around 2.10 million units (MUs) for power supplied between May 2023 and March 2024.

The petitioners, supplying power to open-access consumers such as Tata Steel Ltd., Neosym Industry Ltd., and Fenace Auto Ltd. through Tata Power Trading Company Ltd. (TPTCL), contested the charges, arguing that their solar plants are directly connected to Maharashtra State Electricity Transmission Company Ltd. (MSETCL)’s transmission system and do not utilise MSEDCL’s distribution network.

The petitioners argued that since their power plants inject electricity into MSETCL’s 132 kV transmission grid via dedicated transmission lines owned by Tata Power Renewable Energy Ltd. (TPREL), MSEDCL’s distribution network was not involved.

They cited Section 2(76) of the Electricity Act, 2003, which states that wheeling charges apply only when a distribution system is used. Additionally, Regulation 14.6(b) of the MERC DOA (First Amendment) Regulations, 2019, and MERC’s order in the Jubilant Case (December 27, 2023), reinforced that generators directly connected to the transmission system are exempt from such charges. The petitioners sought a refund of the levied charges and an adjustment of the deducted units.

MSEDCL, in its defence, claimed that auxiliary power supply and metering at the 33 kV level meant its distribution system was in use, citing Section 2(19) of the Electricity Act. It also argued that banking facilities under the DOA Regulations implied usage of its network and referenced the Supreme Court’s 2021 Rain Calcining Ltd v. APTRANSCO ruling, which held that all users of a power system must bear losses. MSETCL, however, countered that the petitioners’ plants are connected solely to the transmission system, and a review petition against the Jubilant Case ruling had been dismissed in March 2025. Additionally, MSETCL pointed to power purchase agreements (PPAs) where petitioners had agreed to bear transmission and distribution losses.

MERC ruled that MSEDCL’s distribution system was not used in this case. Since the petitioners’ solar plants are directly connected to MSETCL’s 132 kV substations via TPREL-owned lines, no wheeling charges were applicable under Regulation 14.6(b). The Commission cited previous rulings, including Kalyani Steels (APTEL, 2006) and Steel Furnace Association (APTEL, 2014), which established that wheeling charges cannot be levied if the distribution system is not used. It rejected MSEDCL’s claim that drawing auxiliary power made the generators "consumers", referencing the Chhattisgarh State Power Transmission Co. Ltd v. CERC (APTEL, 2011) ruling. Additionally, the Commission clarified that the use of banking facilities does not equate to using a distribution system and distinguished the Rain Calcining judgement, stating it was applicable only where a distribution network was involved.

As part of the relief granted, MERC directed MSEDCL to refund INR 1.54 crore in wheeling charges with interest (at the RBI bank rate) within a month. Additionally, the deducted wheeling losses of 2.10 MUs and an additional 4.05 lakh units for the period of April–June 2024 must be credited in the petitioners' next billing cycle. The final order explicitly stated that MSEDCL could not impose wheeling charges or losses for power injected directly into the transmission system.

This ruling reinforces MERC’s regulatory clarity that wheeling charges are not applicable when the distribution system is not used, aligning with previous judicial precedents. By rejecting MSEDCL’s attempts to redefine 'distribution system' to include auxiliary services, the Commission has protected open-access solar generators and consumers from unwarranted financial burdens. The decision also supports the growth of renewable energy by reducing costs for transmission-connected solar projects.