Maharashtra Open Access Consumers to Pay Additional Surcharge of ₹1.31/kWh for FY 2021

Additional surcharge for open access consumers will apply from FY 2020-21 to FY 2024-25


The Maharashtra Electricity Regulatory Commission (MERC) has announced various charges payable by open access consumers for the financial year 2020-21 to 2024-25.

Maharashtra State Electricity Distribution Company Limited (MSEDCL) has said that consumers are buying a considerable amount of power under open access, and on the other hand, it has tied up a sufficient amount of power to meet the expected demand by considering the overall growth in the state. However large number of consumers are buying power under open access instead of availing supply from MSEDCL. As a result, the generation capacity tied up by MSEDCL remains idle.

For the applicability of cross-subsidy surcharge, MSEDCL said that it needs to be based on the current level. Accordingly, the consumers who opted for open access need to be charged for the compensation of current level approval of truing-up for FY 2017-18 and FY 2018-19, provisional truing-up for FY 2019-20 and the aggregate revenue requirement (ARR) for the fourth control period from FY 2020-21 and FY 2024-25 for MSEDCL. To true-up is to match, reconcile, tie-out two the balances with the help of an adjustment.

MSEDCL - Various Charges Applicable for Open Access Consumers

The Commission said that unless fixed costs due to stranded capacity are recovered from open access consumers, this burden would be unjustly passed onto other consumers of a distribution licensee. The Commission added that it would be unfair and unwarranted to pass such a burden of fixed cost recovery of stranded cost to other consumers through consequent tariff hike.

So, MERC noted that under the circumstances, there is a case for the recovery of a part of fixed cost towards the stranded capacity arising from the power purchase obligation through the levy of additional surcharge from open access consumers, including the group captive consumers who have availed such arrangement. It further said that for the fourth control period, an additional surcharge would apply to captive users of group captive power projects, in addition to open access consumers.

The Commission added that there are a few services to be provided by MSEDCL to open access consumers where it may incur some costs.

As per the order, the consumers will be charged ₹14,500 (~$191.67) as the processing fee for up to 1MW, ₹22,000 (~$290.81) for more than 1 MW and up to 5 MW, ₹44,000 (~$581.63) for more than 5 MW and up to 20 MW, and ₹75,000 (~$991.41)  for more than 20 MW and up to 50 MW and above.

MSEDCL - Processing & Operating Charges for Open Access Consumers

Regarding the wheeling charges, the Maharashtra State Electricity Distribution Company Limited (MSEDCL) in its submission had stated that for the control period from FY 2020-21 to 2024-25, it had proposed wheeling charges for three levels only, extra-high voltage (66 kV and above), high tension (combined wheeling charges for 33, 22, and 11 kV) and low tension level.

MSEDCL - Wheeling Cost for FY 2020-21 to FY 2024-25

In its order, the Commission stated that the tariff order is being issued at a critical time when the country is going through one of the most debilitating epidemics in the form of COVID-19. Keeping the current situation in mind, the Commission issued a direction on March 26, 2020, whereby meter reading and physical bill distribution work was suspended, and utilities were asked to issue bills on average usage basis until the current crisis subsides.

The Commission added that it finds it fit to put a moratorium on the payment of fixed charges of the electricity bills by consumers under the industrial and commercial category for the next three billing cycles beginning from the lockdown date of March 25, 2020. The Commission added that in the present situation, relief needs to be given to the electricity consumers affected by the lockdown directions.

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Recently, MERC approved the revised retail electricity tariffs for MSEDCL for the fourth control period from FY 2020-21 to FY 2024-25, focusing on mitigating the difficulties faced by electricity consumers in the states due to the Coronavirus pandemic.

Earlier, the Maha Solar Sangathan, raising concerns over the proposed grid support charges, had requested the MERC to ask the state DISCOM to explain that when the total handling cost of electricity is ₹0.70 (~$0.01)/kWh, why has it proposed a hefty grid support charge to the tune of  ₹8.66 (~$0.12)/kWh.