Mumbai: The Maharashtra Electrical energy Regulatory Fee (MERC) has assured the Bombay Excessive Courtroom that it’ll not implement until 14 July its order that inexperienced energy producers complain makes it tough to produce extra electrical energy to the grid for later retrieval.
The transfer comes after a consortium of renewable vitality builders challenged the choice, saying it will cripple their skill to supply round the clock low-cost energy, rendering them uncompetitive.
The courtroom was listening to a plea filed by the Nationwide Photo voltaic Power Federation of India (NSEFI), JSW Neo Power Ltd, and 9 different photo voltaic builders together with Sunsure Photo voltaic Park MH One Pvt. Ltd and Solenco Photo voltaic Park MH-V Pvt. Ltd.
The builders have known as MERC’s choice arbitrary, illegal, and detrimental to the industrial viability of unpolluted vitality tasks within the state.
MERC, together with the Maharashtra State Electrical energy Distribution Firm Ltd (MSEDCL), submitted that it will not implement the contested provisions till mid-July.
“The aforesaid assertion is accepted as an endeavor given to this courtroom. In gentle of the aforesaid assertion, we discover that at this stage, the petitioners are adequately protected and therefore, no additional ad-interim reduction is handed within the above petitions,” the courtroom mentioned on 1 July.
Along with MERC’s 25 June order, the builders have challenged Regulation 115 of the Multi-Yr Tariff (MYT) Laws, 2024, which empowers distribution firms to suggest new Time-of-Day (ToD) slots and tariffs.
The core concern earlier than the courtroom stems from MERC’s reversal of its March 2024 choice that allowed customers to attract banked solar energy throughout completely different ToD slots—enabling each operational flexibility and monetary effectivity. Beneath the revised guidelines, photo voltaic vitality banked throughout, say, 9 am to five pm, have to be consumed strictly inside that window, considerably diminishing the worth of banking.
This makes the availability of renewable energy to industrial and industrial (C&I) prospects costlier for photo voltaic firms. It’s because solar energy is generated in extra throughout the morning and afternoon hours when the solar shines the brightest. The surplus energy throughout this era is equipped to the grid and drawn by MSEDCL. Later, when the C&I buyer wants energy when the solar units, it tends to attract it again from the grid at a nominal charge, often about 8-10% of the facility banked.
Photo voltaic producers concern {that a} change to the banking construction would jeopardize their long-term energy provide agreements with C&I customers as the price will increase.
MSEDCL proposed to vary the banking construction because it was getting costlier for it to produce the facility again throughout non-solar hours from different sources. India suffers from inadequate capability to retailer its solar energy.
Within the courtroom, builders argued that MERC enacted the change with out public session, a authorized requirement in tariff issues, thereby breaching ideas of pure justice.
“The evaluate petition (filed earlier than MERC) was neither made out there to the stakeholders nor have been the stakeholders permitted to deal with any arguments,” the petition reads, calling the method a “full go-by to the established ideas of regulation.”
In addition they contend that their intervention purposes, which sought a listening to within the evaluate proceedings, have been dismissed with out clarification.
Impression on clear vitality tasks
The petition states that almost 600 MW of photo voltaic capability in Maharashtra is affected by the order.
The builders are searching for to quash each the 25 June directive and Regulation 115, arguing that the latter unlawfully delegates tariff-setting authority to distribution firms.
Authorized specialists say the case raises broader questions round regulatory accountability and administrative equity.
“The failure of MERC to supply due course of, akin to ample listening to or session, earlier than issuing a considerably impactful evaluate order constitutes a direct infringement of the petitioners’ elementary authorized proper to truthful administrative motion,” mentioned Kunal Sharma, founder and managing accomplice at Taraksh Attorneys & Consultants.
He famous that whereas the petition doesn’t instantly problem Regulation 115, the courtroom might nonetheless strike down the order on procedural or jurisdictional grounds.
“The petition derives substantial drive from the argument that the revised banking provisions are inconsistent with the present DOA Laws and that MERC acted past the scope of its restricted evaluate jurisdiction,” Sharma mentioned.
Sachit Mathur, managing accomplice at Emerald Legislation, supplied a distinct view, suggesting the evaluate order might maintain if MERC’s rationale is sound.
“With respect to the ToD tariff and banking provisions, the Fee’s reliance on evaluate jurisdiction could face up to scrutiny. Specifically, the omission of Regulation 20.3 might plausibly qualify as an error obvious on the face of the report,” Mathur mentioned.
MERC maintains that the evaluate order is a clarification, aligning the tariff framework with earlier regulatory processes. It insists that stakeholder enter had been taken throughout the unique MYT proceedings and that repeat session throughout the evaluate just isn’t obligatory. It additionally warned that granting reduction solely on procedural grounds might set a sweeping precedent.
