The Maharashtra Electricity Regulatory Commission (MERC) has directed the Maharashtra State Electricity Distribution Company (MSEDCL) to permit net metering for Hatsun Agro Products’ rooftop solar system, even while the petitioner is availing open access.

The Commission has ordered MSEDCL to revise and adjust Hatsun Agro Product’s electricity bills from November 2023, applying the net metering methodology instead of gross metering.

Background

Hatsun is an MSEDCL consumer and has installed a 983 kW rooftop solar system on its factory premises. This rooftop system was granted grid connectivity under a net metering arrangement in September 2022.

In addition to the rooftop solar system, Hatsun also procures renewable energy through open access, under captive power purchase agreements with third-party solar generators. These arrangements were operationalized in accordance with the Distribution Open Access Regulations 2016. From November 2023, Hatsun began availing short-term open access while continuing to operate its rooftop solar system.

The dispute arose when MSEDCL refused to allow net metering for rooftop solar generation after Hatsun began availing open access. Instead, MSEDCL treated the rooftop solar generation under a gross metering methodology and credited the energy at generic tariff rates, which were significantly lower than the retail tariff that would have been offset under net metering.

Hatsun contended that this action caused substantial financial loss and contravened the regulatory framework in effect after November 2023.

Hatsun argued that the Distribution Open Access Second Amendment Regulations 2023 permit consumers with rooftop solar systems to avail open access and net metering simultaneously.

The company pointed out that the earlier provision, which mandated gross metering during open-access periods, had been deliberately deleted by the Commission. It argued that it met the eligibility criteria, as its contract demand exceeded 1 MVA.

MSEDCL opposed the petition by stating that Hatsun had not applied for open access under the green energy open access framework through the designated nodal agency portal. It said only those consumers who had applied under the green energy open access mechanism introduced in 2023 were eligible to claim net metering benefits during simultaneous operation.

MSEDCL also argued that there was regulatory ambiguity and that it had already filed a clarification petition before the Commission, which was still pending. On this basis, MSEDCL contended that it was justified in continuing gross metering until regulatory clarity was achieved.

Commission Analysis

The Commission noted that under the Distribution Open Access First Amendment Regulations 2019, consumers were indeed permitted to install rooftop solar systems while availing open access. Still, the regulations explicitly required that solar generation be settled on a gross metering basis during the open access period. This position, however, underwent a fundamental change with the notification of the Distribution Open Access Second Amendment Regulations 2023.

This new provision clearly allows consumers with rooftop solar systems to avail of open access, with energy settlement carried out simultaneously through net metering. The Commission emphasized that the regulation leaves no ambiguity regarding the permissibility of net metering after November 10, 2023.

Regarding procedural compliance, the Commission examined MSEDCL’s contention that Hatsun should have applied to the green energy open access nodal agency. It noted that MSEDCL itself had delayed implementing the 2023 amendment and had issued its operational circular only in September 2024, after being directed by the Commission in another case.

The Commission held that a consumer cannot be deprived of substantive regulatory benefits due to delays or lapses by the distribution licensee. Since MSEDCL had already granted open access approvals to Hatsun and scheduled power accordingly, it could not later deny net metering benefits on procedural grounds.

Addressing the argument relating to the pendency of MSEDCL’s clarification petition, the regulator held that the filing of a clarification petition does not suspend the operation of duly notified regulations. The Commission referred to its earlier orders, including those in which it had already affirmed that consumers could simultaneously avail open access and net metering.

It observed that MSEDCL had, in other cases, agreed to extend net metering benefits to similarly placed consumers and therefore could not discriminate against Hatsun.

Based on this analysis, the Commission concluded that, from November 10, 2023, MSEDCL was legally bound to apply net metering to Hatsun’s rooftop solar system, even during periods when open access was being availed. Billing the consumer on a gross metering basis after this date was found to be contrary to the regulations’ express provisions.

Accordingly, the Commission directed MSEDCL to revise the bills, reconcile the financial impact jointly with Hatsun, and grant credit adjustments with applicable interest.

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