The Bombay High Court has ordered the Maharashtra State Electricity Distribution Company (MSEDCL) to verify the amounts paid by a food products manufacturer, adjust any dues, and refund any excess amount collected towards the denied night power tariff rebate, in accordance with the Electricity Act, 2003.

Background

The petitioner, Haldiram Foods International, challenged a communication dated April 25, 2014, through which MSEDCL denied it the benefit of a night rebate under the applicable tariff order.

The company argued that it operates a large-scale manufacturing unit and has invested approximately ₹150 million (~$1.59 million) in a 1.5 MW solar power project to meet its electricity needs.

It contended that under the tariff framework of the Maharashtra Electricity Regulatory Commission (MERC), it was entitled to a night rebate, which would significantly reduce power costs, from about ₹7.01 (~$0.074)/kWh to ₹4.51 (~$0.048)/kWh, but the state utility deliberately denied this benefit.

The petitioner argued that the denial of the rebate was arbitrary and sought a refund of excess charges collected between April and December 2014.

MSEDCL opposed the petition, stating that there were no clear rules governing the recovery of rebates and that granting high night rebates could adversely affect other consumers.

It also argued that since solar power is generated during the day and grid power is consumed at night, applying the rebate in such cases would distort tariff benefits.

Commission’s Analysis

The High Court relied on the observations of MERC, particularly Clause 6.22.6 of its tariff order dated June 26, 2015.

The Commission had clearly stated that until a comprehensive regulatory framework for solar power is developed, the practice of reducing the Time-of-Day (ToD) night rebate by adjusting solar power generated during the day should be discontinued.

Based on this, the Court held that MSEDCL was not justified in denying the petitioner the night rebate. It also noted that any resolution passed by the distribution utility contrary to MERC’s position could not be sustained.

The Court observed that MSEDCL should deduct the amount already paid and recover the amount due from the petitioner, and if an excess amount is paid, the petitioner is entitled to a refund.

The Court reiterated that any amount recovered in excess of the approved tariff must be refunded, together with applicable interest.

Recently, the Bombay High Court dismissed a writ petition challenging MERC’s review order on tariff revisions, holding that the petitioners must avail themselves of the remedy before the Appellate Tribunal for Electricity.

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