MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: / www. merc.gov.in Case No. 54 of 2016 In the matter of Petition of Sai Wardha Power Ltd. for refund of Transmission Charges levied by Maharashtra State Electricity Transmission Co Ltd. Coram Shri Azeez M. Khan, Member Shri Deepak Lad, Member Sai Wardha Power Limited V/s..Petitioner 1.Maharashtra State Electricity Transmission Co. Ltd. 2.Tata Power Company Ltd. (Distribution) 3.Mahindra and Mahindra Ltd.. Respondents Appearance For the Petitioner For Respondent 1 For Respondent 2 : Shri Anand K. Ganesan (Adv) : Shri R. N. Farkade : Ms. Swati Mehendale ORDER Dated: 23 April, 2018 M/s Sai Wardha Power Limited (SWPL) (formerly Wardha Power Company Ltd. (WPCL)), /82/A/431/A Road No. 22, Jubilee Hills, Hyderabad, has filed a Petition, citing Section 42(2), 86 (1) (c) and other applicable provisions of the EA, 2003, on 22 February, 2016 for directions and refund of excess Transmission Charges levied and collected by Maharashtra State Electricity Transmission Co Ltd. (MSETCL). MERC Order in Case No. 54 of 2016 Page 1 of 20

2 2. SWPL s prayers are as follows: 1. Hold and direct that the billing procedure being followed by the Respondent No.1 for levy of transmission charges from the Petitioner wherein the transmission charges are levied directly by the distribution licensee from the partial open access consumer, to be bad in law and illegal; 2. Direct the Respondent No.1 to refund to the Petitioner the principal amount of Rs.19,743,670 (Rupees one crore ninety seven lacs forty three thousand six hundred and seventy only) levied and collected as transmission charges from the Petitioner from May,2014 till January 2016 and also any further amounts collected by the Respondent No.1 after January 2016; 3. Direct the Respondent No.1 to pay interest at the rate of 12% per annum on the amounts wrongfully recovered from the Petitioner contrary to the Open Access Regulations, 2014, from the date of such recovery till the date of refund; 4. Restrain the Respondent No.1 from billing and recovering further transmission charges from the Petitioner for the supply being made by the Petitioner to the Respondent No.3 using the intra-state transmission system, for which the transmission charges are being recovered by Tata Power from the Respondent No.3 in terms of the Open Access Regulations, 2014; 5. Pass an ex-parte ad-interim order in terms of prayer (d) above and confirm the same after notice to the Respondents; 6. Award costs of the present petition; 3. The Petition states as follows: 3.1 SWPL is a Generating Company having a Generating Plant with a capacity of 540 MW (4 x 135 MW), located at Warora, Dist. Chandrapur. Out of 540 MW, two Units of 135 MW each are Captive Generating Plants (CGPs) primarily supplying power to shareholders of SWPL, being industrial consumers. 3.2 SWPL s Generating Stations are connected to MSETCL, which is the State Transmission Utility (STU) for Maharashtra. The supply of power to the captive consumers of SWPL is done by obtaining Open Access through the Intra-State Transmission System (InSTS) of MSETCL and no-objections from the concerned Distribution Licensees in Maharashtra. 3.3 Mahindra and Mahindra (MML) is one of the captive consumers of SWPL for its facility at Kandivali, Mumbai in the area of Tata Power Co. Ltd. (Distribution) MERC Order in Case No. 54 of 2016 Page 2 of 20

3 (TPC-D). MML has a Contract Demand of 7851 MVA with TPC-D and also avails 6 MW from SWPL through Open Access from 19 May, For the purposes of use of the InSTS for Open Access and supply to its captive consumers, SWPL has entered into a Bulk Power Transmission Agreement (BPTA) on 28 February, 2012 with MSETCL. 3.5 In terms of the Open Access Regulations, the then existing and the provisions of BPTA, the Transmission Charges were to be billed and collected by MSETCL for the Open Access granted. 3.6 With regard to Open Access on the distribution system and also partial supply made by the Distribution Licensee to Open Access consumers, the charges were separately billed and collected by the Distribution Licensee. The bill for the Distribution Licensee did not include the charges for transmission lines of MSETCL used as per Regulation 8.2 of Open Access Regulations, The Commission notified the Distribution Open Access (DOA) Regulations, 2014 on 26 June, In these Regulations, the Commission has amended the procedure for billing and recovery of Open Access charges by the Transmission Licensees and Distribution Licensees. Regulation 15.2(v) of DOA Regulations, 2014 provides that, where a consumer takes partial Open Access from a Distribution Licensee, such consumer should pay Transmission Charges to the Distribution Licensee instead of the Transmission Licensee for the use of Transmission Network. 3.8 An Open Access consumer who is also a partial consumer of electricity being supplied by Distribution Licensee would have monthly bills being raised by Distribution Licensee for the electricity so supplied and also for the wheeling of electricity through Open Access. In such circumstances, it would be much simpler if the Distribution Licensee in the same bill also levies and collects the transmission charges which can then be settled between the Transmission Licensee and Distribution Licensee. 3.9 In terms of the above provisions of DOA Regulations, 2014, the charges for the use of system of MSETCL were to be billed and levied by TPC-D in the area of supply of MML TPC-D has billed and levied Transmission Charges on the Open Access supply taken by MML for May, However, MSETCL has also been billing and collecting Transmission charges from SWPL for the use of the InSTS for the supply of electricity to MML from May, 2014 and even after coming into force of the DOA Regulations, MERC Order in Case No. 54 of 2016 Page 3 of 20

4 3.11 The above recovery by MSETCL is contrary to the DOA Regulations, It also results in double recovery of Transmission Charges inasmuch as TPC-D has already billed and recovered the Transmission charges from MML. This recovery is in terms of Regulation 15.2(v) of DOA Regulations, 2014, which is to be settled between TPC-D and MSETCL MML and TPC-D have taken up with MSETCL the double recovery of Transmission Charges. However, there has been no positive response from MSETCL. Even till date, MSETCL continues to bill and recover Transmission Charges which, as per DOA Regulations, 2014, are to be billed and recovered by the Distribution Licensee SWPL has approached the Commission seeking directions to MSETCL to rectify its billing procedure and also to refund the Transmission Charges billed and collected from SWPL since June, From May, 2014 and up to January, 2016, MSETCL has billed and collected the principal amount of Rs. 19,743,670 as Transmission Charges for the use of the InSTS, whereas the same amount has also been paid by MML to TPC-D. 4. In its Reply dated 22 July, 2016, MSETCL has stated that : 4.1 SWPL was granted Long Term Open Access (LTOA) for 24 Captive consumers vide STU letter dated 28 December, As per the MERC (Transmission Open Access) Regulations ( TOA Regulations ), 2005, BPTA was executed between SWPL and MSETCL for allocation of MW of Transmission Capacity Rights (TCR) in InSTS through MSETCL s transmission network on 28 February, 2012 for 25 years. 4.3 SWPL has a generating capacity of MW of power for supply to its proposed captive consumers from its (2 x 135MW) Generating Units 3 and 4 at Warora, Dist. Chandrapur. The list of the proposed captive consumers as per Schedule 3 to BPTA included MML at Kandivali with Open Access capacity of 4.10 MW, out of 22 captive consumers for total Open Access capacity of MW. 4.4 As per Clause of BPTA, SWPL is liable and agreed to pay Transmission Charges for the allotted TCR of MW, as the BPTA is executed between MSETCL and SWPL (and not the captive consumers of SWPL). 4.5 Accordingly, as per BPTA Clause 7.3, first Monthly Transmission Charges (MTC) bill for the TCR so reserved for SWPL for utilizing MSETCL s InSTS was raised in April, 2012 pursuant to the prevalent InSTS Tariff Order. The same practice is followed by MSETCL on raising MTC bills to SWPL till date, i.e. presently the monthly bill is Rs crore. MERC Order in Case No. 54 of 2016 Page 4 of 20

5 4.6 SWPL in its Petition has noted that one of its captive consumers, MML, is located in the distribution area of TPC-D with a demand of 6 MW being met by partial Open Access. MML being a partial Open Access consumer, TPC-D has been raising MTC bill to MML as per the DOA Regulations, MML approached MSETCL with regard to double recovery of Transmission Charges vide letters dated 11 August and 12 September, A meeting was held by Chief Engineer, STU on 10 November, 2014 with TPC-D and MML. 4.8 MSETCL, vide letter dated 07 January, 2015, informed MML about furnishing of necessary information as discussed in the meeting, and a copy was forwarded to TPC- D. The required information, particularly the calculation sheet showing clearly the calculation of double Transmission Charges both by MSETCL and TPC-D, is not yet submitted by MML. TPC-D wrote on 26 August, 2014 and MML on September and 28 September, 2015 to STU in the matter. 4.9 In response to TPC-D and MML s letters, STU, vide letter dated 8 October, 2015, informed that MSETCL is raising MTC bill on the Captive Generator SWPL as per the BPTA, in which SWPL is given LTOA to the transmission network of MSETCL. LTOA Transmission Charges collected by MSETCL from SWPL are treated as Non- Tariff Income and set-off against the Total Transmission Cost of the State. Thus the benefit to that extent is passed on to all consumers through the Distribution Licensees. TPC-D was requested to discontinue charging the Transmission Charges from MML As BPTA has been executed between the erstwhile WPCL (now SWPL) and MSETCL and not with the captive consumers of SWPL (whose demand is being partially met by the local Distribution Licensee), MSETCL, as per Clause 7 of BPTA, continued to raise bills in accordance with the InSTS Orders passed by the Commission from time to time The Transmission LTOA is granted by STU on the application of any Transmission System User (TSU). The recognition to any partial Open Access consumer for Transmission Open Access is granted by STU on the application made by such consumer on the recommendation of the Distribution Licensee who has granted the Distribution Open Access to such consumer. Without any approval from STU about granting of Transmission Open Access, TPC-D unilaterally started billing MML as per the DOA Regulations, The Commission in its InSTS Tariff Order dated 26 June, 2015 in Case No.57 of 2015 stated that the demand of SWPL, though being included in the demand of Distribution Licensees, is not being considered for sharing of the Total Transmission System Cost (TTSC) at present and shall pay the applicable LTOA Charges. MERC Order in Case No. 54 of 2016 Page 5 of 20

6 4.13 The BPTA was executed as per the provisions of the TOA Regulations, 2005 and also considering the DOA Regulations, These Regulations were replaced by corresponding Regulations of 2014 with new provisions for partial Open Access consumers. The DOA Regulations, 2014 have the following provision: "44.3 Open access customers to the Distribution system in the State on the date of coming into force of these Regulations under an existing agreement/contract shall be entitled to continue to avail such access to the distribution system on the same terms and conditions, as stipulated under such existing agreement/contract. Such persons are eligible to avail Long-term Open Access or Medium-term access or Short-term Open Access under these Regulations on expiry of such existing agreement/contract. Provided that the wheeling charge, cross subsidy surcharge, additional surcharge, stand by charge and any other charge as determined by the Commission under this regulation would be applicable to all Open Access consumers The TOA Regulations, 2014 specify as follows: "43.3. Open Access consumers to the Intra-State Transmission System in the State on the date of coming into force of these Regulations under an existing agreement I contract shall be entitled to continue to avail such access to the transmission system on the same terms and conditions, as stipulated under such existing agreement/contract. Such persons are eligible to avail Long-term Open Access or Medium-term Open Access or Short term Open Access under these Regulations on expiry of such existing agreement/contract. Provided the wheeling charge, cross-subsidy surcharge, additional surcharge, stand-by charge and any other charge as determined by the Commission would be applicable to all Open Access consumers." 4.15 Thus, it is evident from the above that, till the BPTA is in force with SWPL, MSETCL is required to bill for LTOA capacity of MW. The billing by TPC-D is unilateral and SWPL has sought refund of the excess Transmission charges As MSETCL is raising bills as per TOA Regulations, 2014, the Commission s prevalent InSTS Tariff Order (Case No 57 of 2015) and BPTA signed with SWPL which is not amended till date, the matter of refund of the principal amount and payment of interest thereon to SWPL does not arise. 5. In its Reply dated 17 October, 2016, TPC-D stated that: 5.1 In terms of Regulation 15.2 of the DOA Regulations, 2014, when a consumer takes partial Open Access from the Distribution Licensee, such consumer should pay the MERC Order in Case No. 54 of 2016 Page 6 of 20

7 Transmission Charges to the Distribution Licensee instead of the Transmission Licensee for use of the transmission network. 5.2 Even after the notification of the DOA Regulations, 2014, STU is continuing to bill and collect Transmission Charges from SWPL for use of the InSTS for supply of electricity by SWPL to MML. 5.3 Such collection of Transmission Charges by STU from SWPL results in double recovery of the Transmission Charges as TPC-D is also recovering the Transmission Charges from MML as per Regulation 15.2 (v). The same have been passed on to TPC-D s consumers through its Aggregate Revenue Requirement (ARR) in Case No. 47 of The Transmission Charges were computed based on the demand of Distribution Licensees including the demand of embedded partial Open Access consumers till FY Hence, consumers of TPC-D were also paying the Transmission Charges of these partial Open Access consumers. If these charges were not collected by TPC-D and passed on to the consumers through its ARR who are actually paying the Transmission Charges, it would be an additional burden on them. TPC-D had raised this issue and explained its position vide its letter dated 26 August, 2014 to. Maharashtra State Load Despatch Centre (MSLDC) and further suggested the methodology for avoiding double accounting of the Transmission Charges to the partial Open Access consumers. 5.5 TPC-D was also guided by MSLDC s letter dated 4 September, 2012 to STU, wherein MSLDC stated that it will not levy Transmission Charges on the Short Term Open Access (STOA) transactions of Captive and Open Access consumers and further stated the Distribution Licensee such as TPC-D may recover the STOA Charges at their end. 5.6 Subsequently, the Commission, in the Multi-Year Tariff (MYT) Regulations, 2015, modified the methodology of considering the demand of a Distribution Licensee, where the demand is considered without the demand of partial Open Access consumers. 5.7 On 30 March, 2016, the Commission has notified the DOA Regulations, 2016 wherein a similar provision with respect to collection of Transmission Charges by the Distribution Licensee has been retained. As per the Regulations, the Distribution Licensee will pay the Transmission Charges to the Transmission Licensee collected on its behalf from the partial Open Access consumers. 5.8 Since the Transmission Charges are computed excluding the demand of the partial Open Access consumers, TPC-D will duly reimburse the appropriate amount so collected to STU, which is in line with the provisions of the DOA Regulations, MERC Order in Case No. 54 of 2016 Page 7 of 20

8 6. At the hearing held on 18 October, 2016: 6.1 SWPL stated that: i) SWPL has a Generating Plant with a capacity of 540 MW (4 x 135 MW) at Warora, Dist. Chandrapur. Out of 540 MW, two Units of 135 MW each are for Captive generation for supplying power to shareholders of SWPL. ii) SWPL has entered into a BPTA on 28 February, 2012 for 25 years for TCR of MW with MSETCL. As per BPTA, Transmission Charges were billed and collected by MSETCL for the Open Access granted to the system of MSETCL. iii) MML is one of the captive consumers of SWPL situated in the supply area of TPC-D. Regulation 15.2(v) of the DOA Regulations, 2014 provides that, when a consumer avails partial Open Access from a Distribution Licensee, such consumer shall pay the Transmission Charges to the Distribution Licensee instead of the Transmission Licensee for the use of the Transmission network. Accordingly, TPC-D is also billing and collecting Transmission Charges on a monthly basis. iv) Recovery of Transmission Charges through BPTA and again by the Distribution Licensee in Open Access billing is a double recovery for the consumer. 6.2 MSETCL stated as follows: i) BPTA for Long Term Transmission Open access was executed between MSETCL and SWPL. As per the BPTA, SWPL is liable and has agreed to pay the Transmission Charges for the allotted TCR of MW on monthly basis. ii) TPC-D has been raising monthly Transmission Charges to MML as per the DOA Regulations, 2014.TPC-D should have informed MSETCL regarding levy of such Transmission Charges to MML iii) The Commission, in its InSTS Tariff Order dated 26 June, 2015 in Case No.57 of 2015, has stated that the LTOA consumers are embedded in the existing Distribution Licensees network area, and their demand is already factored into the demand of the Licensees. Accordingly, LTOA consumers are not being considered for sharing of the TTSC at present. However, they shall pay the applicable LTOA Charges on the basis of the capacity for which the OA has been granted to such consumers. 6.3 The Commission asked MSETCL why the issue was not resolved at its level. MSETCL replied that there are certain difficulties regarding billing of Transmission Charges such as: MERC Order in Case No. 54 of 2016 Page 8 of 20

9 i) Captive consumers may changes their status of Open Access from MTOA to STOA and a few consumers may not avail the power through Open Access from SWPL. In such cases, it becomes difficult to reconcile bills correctly. ii) While paying Transmission Charges as per the BPTA, SWPL makes the payment after deducting Tax Deduction at Source (TDS), which may not be the case while making payments towards Transmission Charges through energy bills of the Distribution Licensees. 6.4 TPC-D stated that the period of the dispute is prior to the DOA Regulations, In accordance with the DOA Regulations, 2016, TPC-D is paying the Transmission Charges to MSETCL after collecting then from the captive consumer, MML. 6.5 The Commission asked MSETCL to conduct a meeting within 15 days to resolve the issues involved in the levy of Transmission Charges with all the Distribution Licensees and concerned Generators under the chairmanship of Chief Engineer (STU), and submit a report within a month. 7. In its response dated 16 December, 2016, MSETCL stated that: 7.1 As per the directives of the Commission vide Daily Order dated 18 October, 2016, a meeting was held on 17 November, The issues discussed and the observations and recommendations are as below: 7.2 Issue No.1: Reconciliation between BPTA and DOA Regulations, 2016: i. The information of number of consumers billed and the total amount billed from April to September, 2016 as per the information submitted by SWPL, TPC-D and MSEDCL does not reconcile with each other. ii. The total amount billed from April to September, 2016 is less and varying from month to month than the allocated capacity of MW as per BPTA. iii. SWPL stated that MSEDCL and TPC-D are billing monthly Transmission Charges to SWPL s captive BPTA consumers, and they are paying directly to Distribution Licensees. Therefore, it is for the Distribution Licensees to reconcile the same with MSETCL. iv. TPC-D stated that, as the Open Access availed by MML from TPC-D is not an Inter-State Open Access, therefore, the requirement to inform the consent MERC Order in Case No. 54 of 2016 Page 9 of 20

10 for grant of Open Access to STU for the period from July, 2014 to March 2016 does not arise. v. However as per DOA Regulations, 2016, TPC-D will duly seek the necessary consent from the consent agencies, including STU, before granting Open Access to the applicant. vi. The LTOA period as per BPTA is 25 years, whereas the corresponding MTOA period of SWPL consumers is of 3 years up to 31 March, Information sought by STU has not considered the STOA transactions of SWPL. Therefore, there is no one to one correlation for the period of Open Access granted. vii. Some consumers of SWPL from the list of MW (BPTA) have cancelled their Open Access and SWPL is requesting amending the BPTA so that new SWPL consumers are included in the BPTA list. Therefore over a period of years, the list may continue changing so as to match the capacity of MW. viii. MSEDCL and TPC-D are charging the Transmission Charges as per the actual Open Access demand recorded for the month and not as per the MTOA capacity granted to the consumers of SWPL by MSEDCL and TPC-D. Therefore, the amount billed by the Distribution Licensees for the Transmission Charges would never match the BPTA capacity of MW. ix. While paying Transmission Charges as per the BPTA, SWPL makes the payment after deducting TDS, which may not be the case while making payments towards Transmission Charges through energy bills of the Distribution Licensees. (B) STU s Recommendation: It is not possible to reconcile month to month between simultaneous use of BPTA and Transmission Charges billing as per DOA Regulations, Either of the one complete process of DOA Regulations, 2016 or BPTA will have to be followed with effect from 1st April, Issue No.2: BPTA or DOA Regulations 2016: Observations: a) If only DOA Regulations, 2016 are followed, the following points need to be considered: MERC Order in Case No. 54 of 2016 Page 10 of 20

11 i. The BPTA will require to be terminated from 1st April, 2016 and Commission needs to consider that any allocated capacity not utilized for the period short of 25 years will not be stranded capacity and there will not be payment of compensation to MSETCL, and also SWPL will not have any right of allocated capacity of MW. ii. iii. The Distribution Licensees, being Nodal Agency for DOA Regulations, 2016, will be required to obtain consent for MTOA/LTOA granted by them to partial Open Access consumers of SWPL from MSETCL/STU. As per DOA Regulations, 2016, the Distribution Licensees will be required to pay Transmission Charges collected from partial Open Access consumers on month to month basis to MSETCL. Whether the same are included in their Coincident and Non-Coincident Peak Demand (CPD/NCPD) and the period can be decided separately for each Distribution Licensee. b) If only BPTA is followed, the following points need to be considered: i. The charges collected by Distribution Licensees from April, 2016 till the issue is decided by the Commission shall be reimbursed to MSETCL by Distribution Licensees and the balance amount for short of MW capacities will be paid by SWPL to MSETCL. That short amount will be paid to MSETCL after deducting TDS. The Commission may decide about the Delayed Payment Charges (DPC) payable to MSETCL from the charges collected from April, ii. iii. As requested by SWPL the BPTA needs to be amended to include new consumers of SWPL to fulfil the allocated capacity of MW. MSETCL will continue billing as per the BPTA from the next month of the decision of the Commission. STU s Recommendation: It is recommended that, since it is LTOA granted for 25 years as per BPTA and amendments can be made to include new consumers within MW capacity, the billing as per BPTA may be continued as per the existing practice. As the existing contracts can be continued as per DOA Regulations, 2016 (Regulation 38.3) and TOA Regulations, 2016 (Regulation 35.3), a proviso can be added below Regulation 14.1(v): provided that transmission charges being collected under existing BPTA shall be continued to be collected till the period of BPTA. MERC Order in Case No. 54 of 2016 Page 11 of 20

12 It is also recommended that, if BPTA is followed as regular payment made to MSETCL by SWPL, then the Commission may decide about the recovery of DPC from April, 2016 onwards payable to MSETCL by SWPL. 7.4 Issue No.3: Refund of charges collected by TPC-D from MML from May, 2014 to March, 2016 Observations: 1) TPC-D collected Transmission Charges from MML from May, 2014 up to March 2016 for MTOA and also STOA of Rs.2,07,58, as per Regulation 15.2(v) of the DOA Regulations, ) As the injection point (SWPL) was in the InSTS, TPC-D, while granting MTOA, should have obtained consent from the STU. TPC-D has also not forwarded a copy of the MTOA approval to STU. 3) STU continued to bill SWPL for complete capacity of MW, as the existing contracts can be continued as per DOA Regulations, 2014 (R. 44.3) and TOA Regulations, 2014 (R 43.3). 4) The Commission in its InSTS Tariff Order (Case No.57 of 2015), at paras. 65 and 66, stated that the demand of SWPL, though included in the demand of Distribution Licensees, was not being considered for sharing of the TTSC at present and shall pay the applicable LTOA Charges. 5) As per DOA Regulations, 2014, there was no provision for payment of Transmission Charges collected by Distribution Licensees from partial Open Access consumers to Transmission Licensees. Such provision is there in DOA Regulations, 2016 (R. 14.5). B) STU s Recommendations: 1) Up to March, 2016, MSETCL has already collected the Transmission Charges from SWPL, which were again paid by MML to TPC-D for its partial Open Access capacity without confirming the same from STU. It is recommended that TPC-D shall refund the Transmission Charges collected from MML for MTOA transactions only as STOA is dealt by MSLDC. 2) Similarly, if billing as per BPTA is continued from MTC of April, 2016, then also TPC-D shall pay the charges collected from MML for the MTC of April, 2016 to June, 2016 to MSETCL. MERC Order in Case No. 54 of 2016 Page 12 of 20

13 3) From the MTC of July, 2016, TPC-D has agreed to transfer the Transmission Charges collected by it from MML to MSETCL. 7.5 Issue No.4: MSETCL s Arrears up to due from SWPL A) Observations: 1) MSETCL, in pursuance to the Commission s Daily Order dated 18 October, 2016, vide letter dated 20 September, 2016 has informed SWPL by dated 08 November, 2016 amount for arrears reconciliation up to March, ) By dated 28 November, 2016, SWPL has confirmed the same amount of balance arrears, but has agreed to pay after adjusting the payment of MML to TPC-D after receipt of final directions from the Commission. 3) After payment of arrears, DPC will be informed to SWPL depending on the date of receipt of the arrears amount. Therefore, MSETCL has issued demand note for balance arrears of Rs.3,06,08,550 on 01 December, 2016 and SWPL can adjust its payment of MML if necessary from the DPC bill that will be issued later as per the decision of the Commission. B) STU s Recommendation: SWPL may be directed to pay the arrears up to March, 2016, if not paid, and pay the DPC amount depending upon the directions of the Commission in case of refund to MML by TPC-D. Thus, it will be in continuation of the Daily Order dated 24 August, 2016 in M.A No.10 of 2016 in Case No. 107 of On 23 February, 2017, the Commission heard this matter along with Case No. 107 of SWPL stated that: i) As per the BPTA, Transmission Charges were billed and collected by MSETCL for the Open Access granted to the system of MSETCL. ii) MML. is one of the captive consumers of SWPL situated in the supply area of TPC-D. Regulation 15.2(v) of the DOA Regulations, 2014 provides that, when a consumer avails partial Open Access from a Distribution Licensee, such consumer shall pay the Transmission Charges to the Distribution Licensee instead of to the Transmission Licensee for the use of the Transmission network. Accordingly, TPC-D is also billing and collecting Transmission Charges on a monthly basis. MERC Order in Case No. 54 of 2016 Page 13 of 20

14 iii) Some of the captive consumers of SWPL situated in the supply area of MSEDCL are also partial Open Access consumers. MSEDCL is also billing and collecting Transmission Charges on a monthly basis since April, iv) Recovery of Transmission Charges under the BPTA and again by the Distribution Licensee in OA billing amounts to double recovery from the consumer. v) At the last hearing, MSETCL was directed to reconcile the position and submit its report to the Commission. 8.2 MSETCL stated that: i) As per the BPTA, SWPL is liable and has agreed to pay the Transmission Charges for the allotted TCR of MW on monthly basis. ii) The STU has come to know about the recovery of these charges by the Distribution Licensees only after filing of the present Petition. iii) As directed in Daily Order dated 18 October, 2016, CE (STU) took a meeting with SWPL, MSEDCL and TPC-D on 17 November, Based on the deliberations and discussions, a report with STU s observations and recommendations has been submitted to the Commission on 16 December, iv) Since the BPTA is existing prior to notification of DOA Regulations, 2014, STU suggests that the Transmission charges be recovered as per the BPTA. 8.3 MSEDCL stated that : i) It has started recovering the Transmission Charges from partial Open Access Consumers only after the notification of DOA, Regulation ii) It has recovered the Charges as a Distribution Licensee. 8.4 TPC-D stated that: i) Partial Open Access Consumers are embedded in TPC-D s network. The demand of TPC-D includes the Partial Open Access Consumers demand while calculating the Transmission Charges. ii) TPC-D has recovered the Transmission Charges as per DOA Regulations, 2014 and SWPL and TPC-D were allowed to file their submissions within two weeks. MERC Order in Case No. 54 of 2016 Page 14 of 20

15 9. In its additional submission dated 17 March, 2017, TPC-D stated that: 9.1 It is the recommendation of the STU that, because it is not possible to reconcile month to month between simultaneous use of BPTA and Transmission Charges billing as per DOA Regulations, 2016, either the complete process of DOA Regulations, 2016 or BPTA will have to be followed from 1 st April TPC-D is not entirely in agreement with the STU recommendation for the following reasons: (i) DOA Regulations, 2016 are applicable to all eligible consumers seeking Open Access. Most of the consumers applying for Open Access, more particularly partial Open Access, do not have the supporting BPTA. In fact, a BPTA is not a requirement as per the said Regulations to be submitted as part of the Open Access Application. A Distribution Licensee is not party to the BPTA that the Generator has with the STU. Therefore, doing away with the process of collecting Transmission Charges by the Distribution Licensee in case of a partial Open Access consumer would not be appropriate. (ii) The process of amending a BPTA regarding the payment/collecting the Transmission Charges would be far less lengthy than amending the DOA Regulations, It is the recommendation of STU that, as the LTOA has been granted for 25 years as per BPTA, the billing as per BPTA may be continued as per existing practice. Further, the Commission may decide regarding recovery of DPC from April, 2016 onwards payable to MSETCL by SWPL. 9.4 In this regard, it is reiterated that the procedure for amendment of the BPTA would not be long drawn and, therefore, suitable amendment regarding payment of Transmission Charges could be made in the BPTA. 9.5 TPC-D in the capacity of a Distribution Licensee is bound by the provisions of the DOA Regulations, The Regulations provide that Partial Open Access consumers of a Distribution Licensee should pay the Transmission Charges to Distribution Licensee instead of Transmission Licensee for using a Transmission network. That provision has been amended by the Commission as per DOA Regulations, 2016 to include that the Distribution Licensee will pay the Transmission Charges to the Transmission Licensee collected on its behalf from the partial Open Access consumers. 9.6 Without prejudice to the submissions made by TPC-D in Case No. 142 of 2016, in line with the provisions of the DOA Regulations, 2016, TPC-D will continue to collect the Transmission Charges from the partial Open Access consumers. MERC Order in Case No. 54 of 2016 Page 15 of 20

16 9.7 The question of refund of charges collected by TPC-D from MML does not arise since TPC-D has been rightfully collecting the Transmission Charges as determined by the Commission from time to time. The STU in its Report has rightly observed that the demand of the Open Access consumers is included in the demand of the Distribution Licensees (TPC-D in this case) and, therefore, the Transmission Charges are collected by the Distribution Licensees. 9.8 The Commission, vide its InSTS Tariff Order in Case No. 57 of 2015, ruled that the demand of TPC-D which was used to arrive at the share of Transmission Charges to be borne by TPC-D was inclusive of the demand of Open Access consumers. Hence, the Transmission Charges, which TPC-D was paying to the STU for FY , included Transmission Charges for the demand of the Open Access consumers. Considering this, the Transmission Charges, which were rightly allowed to be collected by the Distribution Licensee as per the DOA Regulations, 2014, should be retained by the Distribution Licensee as revenue. 9.9 As the demand of the partial Open Access consumers is included in the demand of TPC-D while determining the Transmission Charges, this amount has already been paid to the STU as part of Transmission Charges of TPC-D. Hence, remitting the Transmission Charges collected from partial Open Access consumers would result in double payment for the same Open Access transaction while the consumers of TPC- D will bear the burden of the Transmission Charges for the demand of the OA consumers. The Commission, vide its last MYT Order of TPC-D in Case No. 47 of 2016, has directed TPC-D to remit the Transmission Charges collected to the tune of Rs 2.02 crore from Open Access consumers during FY TPC-D has filed a Review Petition challenging the above issue and it is pending adjudication before the Commission The STU's recommendation that TPC-D should refund the Transmission Charges collected from MML is not correct As per the prevalent Regulations and Orders, there seems to be an ambiguity in the applicable Transmission Charges. For instance, in case of a consumer seeking MTOA while it has a Long Term Power Purchase Agreement (PPA) with the Generator, and the Generator seeks LTOA from MSETCL, the consumer is paying Medium Term transmission charges to the Distribution Licensee and the Generator is paying Long Term Transmission Charges to STU for the same Open Access requirement. Comission s Analysis and Ruling 10. The main issue in this Case is whether separate Transmission Charges are recoverable by Distribution Licensees from STOA consumers, despite their MERC Order in Case No. 54 of 2016 Page 16 of 20

17 Generator (SWPL) having a long-term BPTA with the STU and also paying Transmission Charges under that BPTA to the STU. 11. SWPL s Generating Station is connected to the STU. It has entered into a BPTA for MW on 28 February, 2012 with MSETCL for 25 years for use of the InSTS for its 22 Open Access consumers, including MML. SWPL is a TSU as defined in the applicable Open Access and the MYT Regulations. 12. SWPL is paying Monthly Transmission Charges of Rs crore to the STU in accordance with the BPTA for Capacity Rights of MW. The relevant provisions of the BPTA read as follows: And whereas: (c) Long Term Transmission Open Access capacity rights of MW at 220 kv Warora substation of MSETCL are granted to M/s WPCL [now SWPL] for supplying power to its proposed captive consumers through Intra State Transmission network of Maharashtra, the list of proposed captive consumers of M/s WPCL is enclosed as schedule 3.1 (Page No.5 and 6 of BPTA) (iv) To make available MW of Transmission capacity under normal circumstances through transmission network of MSETCL (Transmission Licensee), between such points of injection and drawal points, subject to clearance from SLDC WPCL agrees to pay Transmission charges for MW as per Tariff Order issued by MERC from time to time from the effective date of this agreement. 13. MML, a captive consumer of SWPL listed in the BPTA, is connected to the distribution network of TPC-D and is also its consumer. It is a partial Open Access consumer who is being provided STOA. TPC-D has been separately billing and recovering Transmission Charges from MML since May, 2014, and thereafter citing the DOA Regulations, TSUs (Distribution Licensees and full Open Access consumers) can access the transmission system under the TOA Regulations, and the principles of recovering the Transmission Charges from them and their sharing of the TTSC were specified in the MYT Regulations, 2011 (in effect upto FY ) as follows: 65. Sharing of TTSC by long-term TSUs 65.1 The Transmission System Users shall share the TTSC of the intra-state transmission system in such proportion as the ratio of base transmission capacity rights of each Transmission System User to the total base transmission capacity rights allotted in the intra-state transmission system: MERC Order in Case No. 54 of 2016 Page 17 of 20

18 66. Usage of Intra-State Transmission System The charges for intra State transmission usage shall be shared among various TSUs in the following manner: a) Existing long term TSU with recorded demand up to Base TCR (i.e., average of CPD and NCPD) shall not be subjected to payment of short term transmission charges The Commission notes that the Appellate Tribunal for Electricity (APTEL), in its Judgment dated 13 October, 2015 in Appeal No. 6 of 2015 (Gujarat Electricity Transmission Corp. Ltd. (GETCO) vs. GERC and OPGS Power Gujarat Pvt. Ltd. (OPGS)) ruled that: 11. Respondent no. 2 [OPGS] has raised the issue of non payment of transmission charges to the Appellant as there has been no use of the transmission system by the Respondent no. 2 and further in the absence of any proof of stranded capacity on the transmission system The Respondent no. 2 is bound by the terms and conditions of the BPTA. Under the BPTA Respondent no. 2 reserved capacity of 275 MW on the Intra-State Transmission Network. Respondent no.2 has not terminated the BPTA or surrendered the capacity. The above capacity has been blocked for the Respondent no. 2 by the Appellant and cannot be given to others. In terms of the Open Access Regulations, Respondent no. 2 is liable to pay the transmission charges as determined by the State Commission based on per MW capacity booked irrespective of the actual use of the transmission line. Respondent no. 2 is bound to pay the transmission charges as per the Regulation irrespective of whether it had used the transmission or not. 16. The Commission dealt with the issue of payment of Transmission Charges for STOA while the Generator also had a long-term BPTA with the STU in its earlier Order dated 9 November, 2015 in Case No. 109 of 2014, as follows: 18. In the light of the foregoing, the Commission holds that, having entered into a BPTA of its own volition, GEPL is bound by its terms, including the payments to be made irrespective of the quantum of actual usage as mandated by the relevant Regulations and Orders of the Commission. By its very nature, the BPTA formalises a long term arrangement, separate and distinct from any other Short Term OA dispensation that GEPL may seek from the MSLDC. GEPL had the option not to enter into a BPTA considering the nature of its expected transactions, and limit itself to seeking Short Term OA instead from time to time and thus not bear the additional liability arising from the terms of such BPTA. The fact is that it did not choose such option, erroneously or otherwise, and is, therefore liable to pay the consequent dues to MSETCL MERC Order in Case No. 54 of 2016 Page 18 of 20

19 17. That Order was upheld by APTEL in its Judgment dated 3 July, 2017 in Appeal No. 16 of 2016, concluding that: 11. (b) (iv)... In view of our discussions as above, the State Commission has rightly held that the BPTA formalises long term arrangement for which LTOA charges are applicable which is different from short term transactions made through traders or exchange on which STOA charges are applicable. The Appellant, despite having LTOA/ Transmission Capacity Rights by way of BPTA willingly chose to sell its power to traders and at exchange by seeking STOA from MSLDC. The Appellant is solely responsible for its current situation. The Appellant also had the option to surrender the Transmission Capacity Rights granted to it as per the MERC (Transmission Open Access), Regulations, 2005 which it exercised at a later date and accordingly, allowed by the Respondent No. 2 and the State Commission. Accordingly, the Appellant is liable to pay LTOA charges to the Respondent No. 2 and applicable STOA charges for transactions carried out from time to time for sale of its power through traders and at exchange as per prevalent regulations of the State Commission. 18. The capacity booked under a long term BPTA is blocked and cannot be used for others. However, STOA is different from LTOA/ MTOA, which is granted from the spare capacity in the System. Moreover, in case of LTOA and MTOA, the Transmission Charges are based on Capacity, whereas they are in actual energy (kwh) terms for STOA. Thus, LTOA and STOA are different and distinct from each other. Moreover, in the context of Regulations 65 and 66.4(a) of the MYT Regulations, 2011 (quoted earlier) regarding long-term TSUs being exempt from payment of short-term transmission charges, in the present case MML is not a TSU but a partial Open Access consumer availing STOA for sourcing power from SWPL, and hence stands on an altogether different footing notwithstanding SWPL s BPTA with the STU. As the definition in the MYT Regulations, 2015 makes even more clear, TSUs are the Distribution Licensees and long-term Open Access Users, and expressly exclude partial Open Access Users. 19. Thus, such Open Access consumers availing STOA are liable to pay the Transmission Charges irrespective of whether or not the Generator from whom they source power has a BPTA with the STU, and even if such consumers are listed in that BPTA. Therefore, the question of refunding to SWPL the Transmission Charges for the STOA availed by MML does not arise. The Commission notes in passing that, in any case, such refund, even had it been held to be due, would have to be made to MML and not to SWPL. 20. TPC-D has also stated that the subsequent MYT Regulations, 2015 have modified the methodology of considering the Demand of a Distribution Licensee, inasmuch as it now excludes the Demand of partial Open Access consumers. That is not so. Regulation 62.2 reads as follows: MERC Order in Case No. 54 of 2016 Page 19 of 20

20 62.2 The Annual Transmission Charge payable by Transmission System User shall be computed in accordance with Provided that the Allotted Capacity for long-term Open Access Users, excluding partial Open Access Users shall be considered in lieu of the average monthly CPD and NCPD for calculating the Base TCR for such Open Access Users. 21. In view of the foregoing, the Distribution Licensees are rightly claiming the Transmission Charges collected from partial Open Access as these are embedded consumers and their Demand is subsumed in the Distribution Licenses Demand while arriving at the InSTS Charges. Para. 8 of the Commission s Order dated 22 November, 2017 in Case No. 165 of 2016 (on TPC-D s Petition for review of the last MYT Order) may also be referred to in this context. The Petition of M/s Sai Wardha Power Limited in Case No. 54 of 2016 stands disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member MERC Order in Case No. 54 of 2016 Page 20 of 20