before the maharashtra electricity regulatory commission 58 42/order-17 of 2015-08112016.pdf ·...

MERC Order in Case No. 17 of 2015 of 19

Before the

MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai - 400 005

Tel. No. 022 22163964/65/69 – Fax 022 22163976

E-mail: [email protected]

Website: www.mercindia.org.in/www.merc.gov.in

CASE No.17 of 2015

In the matter of

Petition of Maharashtra Electricity Distribution Co. Ltd. for determination of Cross-

Subsidy Surcharge for the period from 1.9.2013 to 28.2. 2014

Coram

Shri. Azeez M. Khan, Member

Shri. Deepak Lad, Member

Maharashtra State Electricity Distribution Co. Ltd. Petitioner

Appearance

For the Petitioner :Shri. Ashish Singh (Advocate)

Shri. Abhijit Deshpande (Representative)

Shri. D. H. Kulkarni (Representative)

ORDER

Dated: 8 November, 2016

The Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) has filed a Petition

on 9 January, 2015 for determination of the Cross-Subsidy Surcharge (CSS) for the period

from 1 September, 2013 to 28 February, 2014. The Petition has been filed consequent to the

Judgment of the Appellate Tribunal for Electricity (ATE) dated 11 September, 2014 in Appeal

Nos. 23 of 2014 and 65 of 2014 setting aside the Order of the Commission in Case No. 107 of

2013 and remanding the matter to the Commission for the re-determination of the CSS for that

period.

The Miscellaneous Applications of Sterlite Technologies Ltd. (4 of 2015), UP Twiga

Fibreglass Ltd. (6 of 2015) and Sudarshan Chemical Industries Ltd., Roha and Mahad (7 and 8

of 2015, respectively) to intervene in the present proceedings prior to the public consultation

process were disposed of vide the Commission’s Daily Order dated 31 May, 2016.

mailto:[email protected]

http://www.mercindia.org.in/


Background

2. The Commission had determined the tariff for supply of electricity by MSEDCL in its

Tariff Order dated 16 August 2012 in Case No. 19 of 2012, effective from 1 August, 2012.

Vide Order dated 21 February, 2013 in Case No. 138 of 2012 the Commission had

determined the CSS for MSEDCL in accordance with that Tariff Order. Thereafter, the

following Orders were passed by the Commission:

a. Case No. 77 of 2012 (8 February, 2013): The Order was issued on a Petition filed by

the Maharashtra State Power Generation Co. Ltd. (MSPGCL) seeking review of its

Tariff Order dated 21 June, 2012 in Case No. 6 of 2012. Accepting the review of

certain costs, the Commission had allowed certain additional amounts for recovery by

MSPGCL.

b. Case No. 56 of 2013 (13 May, 2013): The Commission approved the Transmission

Tariff for the Intra-State Transmission System (InSTS), including the tariffs payable

by MSEDCL in FY 2013-14 to FY 2015-16. This Order resulted in an increase in the

monthly Transmission Tariff payable by MSEDCL from April, 2013.

3. In view of the substantial financial implications of these Orders on MSEDCL, the

Commission, vide its Order dated 5 September, 2013 in Case No. 95 of 2013, allowed

MSEDCL to recover from its consumers two Additional Energy Charges (AEC) -- AEC-1

and AEC-2 -- over six months.

4. The Average Billing Rate (ABR) of MSEDCL increased on account of allowing the AEC

to be recovered from consumers. In Case No. 107 of 2013, MSEDCL consequently sought

re-determination of the CSS to take into account the increased ABR. In its Order dated 29

October, 2013, the Commission determined the CSS by considering the AEC-1 and AEC-2

that had been allowed for recovery. This CSS was applicable for the period from 1

September, 2013 to 28 February, 2014.

5. Vidarbha Industries Association (VIA) and Sterlite Industries filed Appeal Nos. 23 and 65

of 2014, respectively, against this Order. In its Judgment dated 11 September, 2014, the

ATE directed as follows:

“It is noticed that the Order passed on 05.09.2013 has already been set aside in Appeal

No. 295 of 2013, and the matter has been remanded for re-determination.

Consequently, the impugned Order dated 29.10.2013 challenged in this Appeal has also

to be set aside and remanded for re-determination. Accordingly, Ordered.


In view of the above Order, it is open to the Appellants to approach the Distribution

Company for refund of the amount, which has been collected earlier.

With these observations, both the Appeals are disposed of.”

The present Petition has been filed by MSEDCL consequent to the ATE Judgment.

MSEDCL Petition

6. MSEDCL’s substantive prayers are as follows:

“1. To admit the Petition for determination of cross subsidy surcharge accordance with

the Section 42 (2) and 86 (1) of Electricity Act 2003 and Regulation 13 of MERC

(Distribution Open Access) Regulations, 2005;

2. To approve the cross subsidy surcharge as worked out by MSEDCL.”

7. The Petition states as follows:

a. Vide its Order dated 3 September, 2013 in Case No. 28 of 2013 and Order dated 4

September, 2013 in Case No. 44 of 2013, the Commission approved certain dues payable

to MSPGCL. Vide its Order dated 5 September, 2013 in Case No. 95 of 2013, the

Commission determined suo-motu the Supplementary Charges recoverable by MSEDCL

from its consumers to meet the payments to be made to MSPGCL and the Maharashtra

State Electricity Transmission Co. Ltd. (MSETCL).

b. In all these Orders, the Commission ruled that the increase in the Energy Charge

component of the amount billed by MSPGCL to MSEDCL would be recoverable by

MSEDCL from its consumers through the Fuel Adjustment Charge (FAC) mechanism.

The Commission also allowed MSEDCL to recover from its consumers the increase in

the Fixed Charge component of the amount billed by MSPGCL and MSETCL in

proportion to the approved ABR of the respective consumer categories.

c. Accordingly, MSEDCL levied additional AEC and FAC in the monthly energy bills

from September, 2013. Consequently the ABR of its consumers increased. In turn, this

increase in ABR necessitated revision of the CSS payable to MSEDCL by Open Access

(OA) consumers.

d. Hence, MSEDCL filed a Petition in Case No. 107 of 2013 seeking re-determination of

CSS. The Petition inadvertently stated that MSEDCL had sought the re-determination of

CSS only due to the increase in the ABR arising from the Order in Case No. 95 of 2013.

The Commission, vide its Order dated 29 October, 2013 had determined the CSS

accordingly.


g. MSEDCL also filed a separate Petition in Case No. 185 of 2013 seeking re-

determination of CSS considering the increased ABR arising from the Orders in Case

Nos. 28 of 2013 (dues payable to MSPGCL) and 44 of 2013 (dues payable to

MSPGCL). This Petition was dismissed vide Order dated 27 March, 2014 on the ground

that it was not filed under the Commission’s review jurisdiction, but the Commission

granted liberty to MSEDCL to take appropriate action under law. Therefore, MSEDCL

had filed a Petition in Case No. 108 of 2014 seeking review of the Order dated 29

October, 2013 in Case No. 107 of 2013.

h. In the meantime, the Commission’s Order in Case No. 107 of 2013 was challenged in

Appeal Nos. 23 of 2014 and 65 of 2014 before the ATE. Vide its Judgment dated 11,

September, 2014, the ATE set aside the Commission’s Order on the ground that the basis

on which the CSS was determined, i.e. the Order dated 5 September, 2013 (determining

the Supplementary Charges recoverable by MSEDCL) had already been set aside and

remanded vide its Judgment dated 22 August, 2014. This matter was also accordingly

remanded to the Commission.

i. In view of the ATE Judgment, the Commission is in the process of conducting suo-

motu proceedings in Case No. 95 of 2013 enabling MSEDCL to recover the charges

from its consumers on account of payments made to MSPGCL and MSETCL. Such re-

determination will further necessitate the re-determination of CSS payable by the OA

consumers.

j In accordance with the Order dated 29 October, 2013, MSEDCL has recovered CSS

from OA consumers during the relevant period. Hence, if the CSS is not re-determined

again, a refund will become due to those OA consumers who had paid it as per the

previous Order, which has been set aside.

k. While re-determining the CSS, the additional FAC (along with AEC) needs to be

considered, since it is not the regular FAC but a special FAC which is being levied as a

consequence of the recent Orders (in Case Nos. 28, 44 and 95 of 2013), and which was

constant for six months along with AEC.

l. The powers to determine CSS and other applicable charges payable by OA consumers

are vested with the Commission under Section 86 (1) of the Electricity Act (EA), 2003.

m. The National Tariff Policy, 2005 stipulates the CSS Formula as S = T– [C (1 + L/

100) + D]. Based on this formula, MSEDCL has calculated CSS by using inputs from

the following Orders of the Commission:

Order dated 16 August, 2012 in Case No. 19 of 2012

Order dated 21 February, 2013 in Case No. 138 of 2012


Order dated 13 May, 2013 in Case No. 56 of 2013

Order dated 3 September, 2013 in Case No. 28 of 2013



n. Computation of Cross Subsidy Surcharge:

i. Computation of „C‟:

Computation of ‘C’ is based on the approved power purchase quantum and price for

FY 2012-13 as per the Tariff Order dated 16 August, 2012. The Merit Order stack of

approved power purchase for FY 2012-13 is as follows:

Station Power Purchase (MU) Average Cost (Rs/Unit)

Ratnagiri Gas (RGPPL) 5256 5.81

Short Term through

traders/exchanges

10675 4.5

Gandhar 1020 4.33

Captive Power Plant (CPP) 900 4.25

VSTP IV 381 4.17

Kawas 1080 4.1

Medium Term 3141 4.1

KSTPS-II 720 4.09

Indep. Power Producers (IPP)

– JSW

1934 3.54

MSPGCL 47663 3.14

TAPP 3&4 3293 3.01

KSTPS III 687 2.73

VSTP III 2400 2.56

Adani Power 1143 2.55

KAPP 760 2.37

Mundra UMPP 1738 2.26

VSTP I 3516 2.23

VSTP II 2940 2.2

Dodson I 42 2.18

SPP 990 2.05

Pench 72 2.05

Sipat TPS 4983 2.04

Dodson II 89 1.73

KSTPS 5400 1.41

TAPP 1&2 1280 1.06

Total PP excluding Non-

Conventional Energy (NCE)

102103

NCE excluding CPP 7744 4.52

Total PP including NCE 109847 3.39


‘C’ can be taken as the weighted average power purchase cost of the top 5% at the

margin. Accordingly, Rs. 5.81 per unit, which is the power purchase cost of RGPPL

contributing 5.14% at the top of the stack, is to be treated as ‘C’ in the CSS

computation formula.

ii. Computation of System loss „L‟:

Approved Wheeling Losses at the respective voltage levels and the Transmission

Losses are used to arrive at the grossed-up total system losses as shown in the Table

below:

Particulars EHV Level 33 kV 22/11 kV LT Level

Transmission Loss (%) 4.19% 4.19% 4.19% 4.19%

Wheeling Loss LT (%) 0% 6.0% 9.0% 12.5%

Total System Losses (%) 4.19% 9.94% 12.81% 16.17%

iii. Computation of Wheeling Charge „D‟:

Approved Wheeling Charges at the respective voltage levels are used to arrive at the

grossed-up total system losses as shown in table below:

Particulars EHV Level 33 kV 22/11 kV LT Level

Wheeling Charge (Rs/Unit) 0 0.11 0.60 1.03

iv. Computation of Average Billing Rate „T‟:

Average Billing Rate (ABR) for each consumer category has been taken as the

effective ABR approved in the Tariff Order dated 16 August, 2012 for 2012-13 and

the AEC (AEC-1, AEC-2, AEC-3 and AEC-4) as approved in Order dated 3

September, 2013 (Case No. 28 of 2013), 4 September, 2013 (Case No. 44 of 2013)

and 5 September, 2013 (95 of 2013).

v. Determination of CSS „S‟:

MSEDCL has computed the category-wise CSS with regard to the computation of

‘C’, ‘L’, ‘D’ and ‘T’ as above.

Preliminary Hearings

8. At the hearing on 17 November, 2015, MSEDCL reiterated the submissions in its Petition,

and sought the following reliefs:


a. Subsequent to the Order dated 26 June, 2015 in Case No. 95 of 2013 confirming AEC-1

and AEC-2, the Commission may declare that the CSS determined to reflect AEC-1 and

AEC-2 in Order dated 29 October, 2013 in Case No. 107 of 2013 was correct.

b. Re-determine the CSS calculated in Case No. 107 of 2013 considering the additional

impact of AEC-3, AEC-4 and additional FAC.

MSEDCL also stated that a consumer has approached it for refund of CSS as per the ATE

Judgment dated 11 September, 2013 which remanded the Commission’s Order in Case No.

107 of 2013. However, MSEDCL is yet to refund the CSS as the present matter is sub

judice before the Commission.

9. At the hearing, the Commission observed that the period under consideration is part of FY

2013-14. The true-up of expenses and revenue for FY 2013-14 has been completed in the

Multi Year Tariff (MYT) Order dated 26 June, 2015 (Case No. 121 of 2014). Hence, the

Commission directed MSEDCL to file its submission on the following:

a. Whether over/under-recovery of CSS for FY 2013-14 has not been factored in the true-

up, and its financial implications, if any, on MSEDCL.

b. Procedure to be followed for redetermination of CSS, if any.

10. Accordingly, vide letter dated 11 December, 2015 MSEDCL submitted as follows:

a. In the MYT Order, the Commission observed that it is determining the tariff for FY

2015-16 as petitioned by MSEDCL, duly considering the impact of all the past revenue

gaps/surplus and additional claims up to FY 2015-16. Therefore, it cannot be denied

that the under-recovery of CSS for FY 2013-14 has been factored in the true-up. There

are no financial implications of the same on MSEDCL.

b. However, the under-recovery of CSS for FY 2013-14 gets passed on to the common

consumers who continue to stay with MSEDCL. In the process, OA consumers have

unduly benefited due to levy of less CSS. This has resulted in an inadvertent hike in

tariff to that extent, the burden of which is wrongly borne by common consumers of

MSEDCL.

c. The Commission may re-determine the CSS as per the procedure contemplated under

the EA, 2003.

d. The Commission may undertake a public consultation process by inviting comments

and suggestions from all stake-holders as may be necessary.


11. At the hearing held on 15 December, 2015, MSEDCL submitted that, although it is

financially neutral to under-recovery of CSS from OA consumers, such under-recovery has

been passed on to its other consumers. Hence, MSEDCL requested the Commission to re-

determine the CSS for the period of September, 2013 to February, 2014 through a process

of public hearing. MSEDCL stated that one consumer has approached it for refund of CSS

as per the ATE Judgment dated 11 September, 2013 remanding the Order in Case No. 107

of 2013. More consumers may approach it for refund in future. MSEDCL is yet to refund

such CSS as the present matter is sub-judice before the Commission. On the quantification

of under-recovered CSS, MSEDCL stated that such quantification is yet to be carried out.

The Commission suggested that MSEDCL may rethink its stand on the present Petition by

considering the quantum of alleged under-recovery, and also the fact that MSEDCL is

revenue-neutral.

12. Vide its submission dated 30 May. 2016, MSEDCL stated that, during the period of

September, 2013 to February, 2014, an additional CSS of Rs. 41.57 crore (subject to audit)

was levied on OA consumers as per the Order dated 29 October, 2013. Applications from

23 OA consumers are received demanding refund of additional CSS to the tune of Rs.

25.97 crore.

13. At the hearing held on 31 May, 2016, MSEDCL stated that the present Petition has been

filed as a consequence of the ATE Judgment dated 11 September, 2014 which set aside the

Commission’s Order dated 29 October 2013 and remanded the matter to the Commission

for re-determination of CSS. The CSS determined in the Order dated 29 October, 2013 was

based on the Commission’s Order in Case No. 95 of 2013, which has now been confirmed

by the Commission through an Order dated 26 June, 2015 after conducting a public

consultation process. Therefore, MSEDCL prayed for re-determination of CSS by

undertaking a public consultation process. Such public consultation may be undertaken

along with the Public Hearings on MSEDCL’s latest MYT Petition.

14. MSEDCL also stated that ATE, in its Judgment dated 11 September, 2014, allowed the

consumers to approach MSEDCL for refund of CSS recovered under Order dated 29

October, 2013. Accordingly, 23 applications have been received for refunds, which are

being processed. However, instead of refunding the amount at this stage and collecting it

again from the same consumers after the Commission’s final Order in the present Case,

such refund may be deferred till the issue of the final Order in the present matter.

15. At the hearing, the Commission observed that the ATE in its Judgment dated 11

September, 2014 has set aside the Order dated 29 October, 2013 and remanded the matter

for re-determination. Pursuant to this Judgment, MSEDCL has filed the present Petition for

determination of CSS for the period of September, 2013 to February, 2014. As

determination of CSS requires public consultation, the Commission has decided to conduct

a public consultation process and Public Hearing(s) on the present Petition. Regarding the

refund of the CSS recovered under the earlier Order, the ATE has set aside that Order and


allowed consumers to approach MSEDCL for refund. The Order dated 29 October, 2013

has lost its legal sanctity, and hence any amount recovered pursuant to that Order also loses

its validity in law. Under such circumstances, there is no other alternative but to refund the

amount recovered. Hence, the Commission directed MSEDCL to refund the CSS

recovered, in the light of the ATE Judgment.

Public Consultation Process and Public Hearings

16. Vide letter dated 14 June, 2016, the Commission directed MSEDCL to publish a Public

Notice under Section 64 of the EA, 2003 on its Petition. Accordingly, MSEDCL published

Public Notices on 16 June, 2016 in three English (Indian Express, Hindustan Times and

Times of India) and two Marathi (Lokmat and Punya Nagari) daily newspapers inviting

suggestions and objections on its Petition for determination of CSS for the period of 1

September, 2013 to 28 February, 2014. The Petition was made available for inspection or

purchase at MSEDCL's offices. It was also available on MSEDCL's website

(www.mahadiscom.in) and on the websites of the Commission (www.mercindia.org.in) /

(www.merc.gov.in) in downloadable format.

17. The list of persons from whom the Commission received responses in writing and at the

Public Hearings is at Annexure - I. The Public Hearings were held at Amravati, Nagpur,

Aurangabad, Pune, Nashik, and Navi Mumbai from 11 July, 2016 to 28 July, 2016, as per

the schedule shown in the Table below, along with the Public Hearings in Case No. 48 of

2016 on MSEDCL’s MYT Petition for the 3rd Control Period FY 2016-17 to FY 2019-20.

Sr. No.

Place/Venue of Public Hearing Date of Hearing

1

Amravati -

Hall No.1, Divisional Commissioner’s

Office, Camp, Amravati Monday, 11 July, 2016

2

Nagpur -

Vanamati Hall, V.I.P. Road, Dharampeth,

Nagpur Wednesday, 13 July, 2016

3

Aurangabad -

Meeting Hall, Office of the Divisional

Commissioner, Aurangabad Monday, 18 July, 2016

4

Pune -

Council Hall, Office of the Divisional

Commissioner, Pune Wednesday, 20 July, 2016

5

Nashik -

Niyojan Bhavan, Collector’s Office

Campus, Old Agra Road, Nashik

Monday, 25 July, 2016

6

Navi Mumbai -

Agri Koli Sanskriti Bhavan, Palm Beach

Road, Sector 24, Nerul, Navi Mumbai

Thursday, 28 July, 2016

http://www.merc.gov.in/


18. The Commission has ensured that the due process contemplated under law was followed at

every stage to ensure transparency and public participation. Adequate opportunity was

given to all to submit their responses. The various suggestions and objections received after

issue of the Public Notice, in writing as well as during the Public Hearings, have been

summarized in this Order, and have been addressed in the Section on the Commission’s

Rulings.

Suggestions/ Objections

19. The suggestions/ objections received during the public consultation process are presented

below:

a. As per Section 62 (4) of the EA, 2003, the Tariff may not be amended more frequently

than once in a financial year. MSEDCL issued Commercial Circular No. 190 dated 14

March, 2013 for CSS, and is now again demanding arrears after a period of more than

2 years, which has no legal standing.

b. As per Section 56 (2), no sum due from any consumer shall be recoverable after the

period of two years from the date when such sum becomes first due, unless it has been

shown continuously as recoverable as arrears of charges for electricity supplied.

c. In the MYT Order dated 26 June, 2015 (Case No. 121 of 2014), the Commission had

determined the tariff for FY 2015-16 by considering the impacts of all past revenue

gaps/surplus and additional claims upto FY 2015-16, which also includes impacts

relating to the truing-up of the previous period. Therefore, the Commission had taken

the view that the question of re-determination of CSS for OA transactions for FY

2014-15 and also for FY 2013-14 does not arise.

d. In its MYT Order, the Commission has finalised CSS on the basis of the Tariff Policy.

has clearly mentioned regarding not recovering CSS retrospectively. The Commission

has also simplified the determination of CSS by considering 75% of Average Cost of

Supply (ACoS), and ruled out MSEDCL’s request to recover CSS retrospectively.

e. The demand raised by MSEDCL for past recovery of CSS for the period of September,

2013 to February, 2014 from those consumers who availed OA power during that

period is against the philosophy of promoting competition in the power market as

stipulated in the Tariff Policy and the EA, 2003. The OA was availed by consumers

based on the competitive landed energy cost from the respective Generators. In case

the past recovery is made applicable, the OA power procurement cost may become

higher than MSEDCL’s rates, which would defeat the objective of a competitive power

market.


f. The Central Government has assured industry repeatedly that there will be no new

retrospective imposition of tax, with the in-principle understanding that this is against

the viability of the commercial assessments by parties based on the applicable law at

that point of time. MSEDCL is asking for retrospective implementation of a CSS

which is very high as compared to the earlier CSS. This additional burden on industries

will severely constrain the purpose of OA. Hence, the Commission should not allow

past recoveries of CSS from OA consumers.

g. As per the ATE Order dated 11 September, 2014, the amount collected by MSEDCL

on account of additional CSS has become illegal. Hence, it should have been refunded

in the next billing cycle of September, 2014. Since it has not been refunded so far,

MSEDCL is liable to pay interest at the Bank Rate as per Section 62 (6) of the EA,

2003 till the refund is made.

MSEDCL’s Responses

20. In its responses, MSEDCL has stated as follows in support of its claim for re-determination

of CSS:

a. As stipulated in the Tariff Policy, the EA, 2003 Act and the prevailing OA

Regulations, the CSS shall be utilized to compensate the Distribution Licensee for the

current level of cross subsidy of the respective tariff categories / tariff slabs and / or

voltage level to which a consumer or person belongs or is connected to.

b. Accordingly, the consumers who opted for OA during 1 September, 2013 to 28

February, 2014 are required to pay the CSS to compensate for the level of cross-

subsidy which prevailed during that period by virtue of the Commission’s Orders dated

3, 4 and 5th

September, 2013. This is necessary to avoid passing on the burden on other

non-OA embedded consumers of MSEDCL.

c. The Commission has duly considered the concerns and determined the CSS vide Order

dated 29 October, 2013, which was subsequently recovered from OA consumers by

MSEDCL. That Order was then set aside by the ATE on technical grounds, and was

remanded to the Commission for re-determination.

Commission’s Analysis and Rulings

21. The present proceedings were initiated on the basis of the following remand Judgment

dated 11 September, 2014 of the ATE in Appeal Nos. 23 and 65 of 2014 on the

Commission’s Order dated 29 October, 2013:

“We have heard the learned counsel for the parties.


It is noticed that the Order passed on 05.09.2013 has already been set aside in Appeal

No. 295 of 2013, and the matter has been remanded for re-determination.

Consequently, the impugned Order dated 29.10.2013 challenged in this Appeal has

also to be set aside and remanded for re-determination. Accordingly, Ordered.

In view of the above Order, it is open to the Appellants to approach the Distribution

Company for refund of the amount, which has been collected earlier.

With these observations, both the Appeals are disposed of.”

Vide its Order dated 29 October, 2013 in Case No. 107 of 2013, the Commission had

determined the CSS for the period from 1 September, 2013 to 28 February, 2014 by

considering the increased tariff on account of its Order dated 5 September, 2013 in Case

No. 95 of 2013. However, that Order dated 5 September, 2013 was set aside and remanded

for re-determination by the ATE in Appeal No. 295 of 2013. As the basis on which the

Commission had determined CSS was remanded for re-determination, the ATE also set

aside the Order dated 29 October, 2013 and remanded the matter for re-determination as

quoted above.

22. The present proceedings for determination of CSS for the period of 1 September, 2013 to

28 February, 2014 being a consequence of the above Judgment of ATE dated 11

September, 2014, the question of maintainability of the present Petition or proceedings

does not arise.

23. Further, the recovery of CSS for that period had already been made before the ATE

remanded the matter for re-determination. Hence, the issue of recovery of dues which are

older than two years also does not arise.

24. The ATE remanded the matter for re-determination on the ground that the basis on which

the CSS was determined, i.e. the Order dated 5 September, 2013, had also been set aside

remanded. Subsequent to that remand, the Commission had undertaken the due public

consultation process and issued its final Order in the matter on 26 June, 2015 in Case No.

95 of 2013 with the following rulings:

“13.1 ATE has highlighted in its Judgment that the impugned Order was issued by the

Commission without following the mandatory procedures contemplated under Sections

64 and 86 (3) of the EA 2003 for giving opportunity to the public to raise objections

and suggestions, and ensuring transparency.

13.2 In line with the observations made by the ATE, the Commission has now

conducted the due regulatory and public consultation process through the present

proceedings, as set out earlier in this Order…

Summary of Rulings


15. The cost components of AEC-1 & AEC-2 were approved by the Commission in

the respective Orders following due regulatory process. However, these cost

components were not allowed to be recovered by MSEDCL from its consumers in

those Orders. The Commission is of the view that allowing the recovery of these costs

to MSEDCL is justifiable and necessary.

16. The Commission has scrutinised the rates at which AEC-1 and AEC-2 were

applied by MSEDCL in terms of the principles adopted by the Commission. The total

category-wise AEC charged by MSEDCL is less than the amount of costs allowed to

be recovered, and the category-wise rates levied are also lower than if the principles

had been correctly applied. Hence, the question of allowing carrying cost for over

recovery does not arise.”

Thus, vide its final Order dated 26 June, 2015 in Case No. 95 of 2013, the Commission has

confirmed the recovery of costs through AEC-1 and AEC-2 as stipulated in the earlier

Order dated 5 September, 2013.

25. Subsequent to that final Order dated 26 June, 2015 in Case No. 95 of 2013, at the hearing in

the present matter held on 17 November, 2015, MSEDCL requested the following reliefs:

a. Subsequent to the Commission’s Order dated 26 June, 2015 in Case No. 95 of 2013

confirming AEC-1 and AEC-2, declare that the CSS determined to reflect AEC-1 and

AEC-2 in the earlier Order dated 29 October, 2013 in Case No. 107 of 2013 was correct;

and

b. Re-determine the CSS computed in Case No. 107 of 2013 considering the additional

impact of AEC-3, AEC-4 and additional FAC.

26. As regards the relief sought at 25(a) above, the Commission observes that the CSS

determined in its Order dated 29 October, 2013 was based on the AEC-1 and AEC-2

stipulated in the Order dated 5 September, 2013:

“19. Applicability of Category wise Cross Subsidy Surcharge:

19.1.The category-wise applicable CSS as arrived on consideration of the

additional amount recoverable by MSPGCL from MSEDCL vide Order dated 5

September, 2013 in Case No. 95 of 2013 (providing AEC-1 & AEC-2) and

corresponding components T, C, L & D from the above section is provided in

Annexure II.”

As mentioned at para. 24, vide its Order dated 26 June, 2015, the Commission has already

confirmed the AEC-1 and AEC-2 stipulated in the Order dated 5 September, 2013.

Therefore, the ground on which CSS computation in the Order dated 29 October, 2013 was

remanded for re-determination has ceased to exist.


27. Hence, the Commission confirms that the CSS determined to reflect the increased

ABR on account of AEC-1 and AEC-2 in the Order dated 29 October, 2013 in Case

No. 107 of 2013 is correct and applicable for the period from 1 September, 2013 to 28

February, 2014. Accordingly, the computation of the category-wise CSS is shown in

Annexure II. Along the lines of the dispensation approved by the Commission in its

Order dated 29 October, 2013, only 25% of the applicable CSS will be payable by OA

consumers purchasing power from renewable sources of energy.

28. With reference to the relief sought at para 25(b) above, the Commission notes that, as in

the Order dated 29 October, 2013, in the present remand proceedings MSEDCL has applied

the CSS formula stipulated in the Tariff Policy, 2005. The values of each parameter of the

CSS formula are also the same as in the Order dated 29 October, 2013 except for the value

of the ABR (‘T’). In the Order dated 29 October, 2013, ‘T’ was calculated based on the

AEC approved in Order dated 5 September, 2013. However, for calculating ‘T’, MSEDCL

has now included the impact of other Orders, i.e. dated 3 September, 2013 (Case No. 28 of

2013) and Order dated 4 September, 2013 (Case No. 44 of 2013), along with the AEC-1

and AEC-2 approved in the Order dated 5 September, 2013 (Case No. 95 of 2013).

29. The Order dated 3 September, 2013 in Case No. 28 of 2013 related to implementation of

the ATE Judgment in respect of MSPGCL. In that Order, the Commission had allowed

MSPGCL to recover the impact of the ATE Order from MSEDCL, and in turn allowed

MSEDCL to pass on such impact to its consumers through the FAC mechanism. Similarly,

in its Order dated 4 September, 2013 in Case No. 44 of 2013 regarding the capital cost and

tariff for FY 2012-13 of Khaperkheda Unit 5, the Commission allowed MSPGCL to pass

on its impact to MSEDCL, and MSEDCL to pass on that impact to its consumers through

the FAC. As these Orders specifically provided a mechanism for passing on the impact to

consumers, their impacts were not included in the Order dated 5 September, 2013 in Case

No. 95 of 2013. MSEDCL’s Petition in Case No. 107 of 2013 for determination of CSS for

1 September, 2013 to 28 February, 2014 was based only on the increased tariff on account

of the Order dated 5 September, 2013. The increase in tariff on account of other Orders, i.e.

dated 3 and 4 September, 2013, was not included in that Petition. Hence, in its Order dated

29 October, 2013, the Commission had determined the CSS considering only the higher

tariff on account of the Order dated 5 September, 2013.

30. In these proceedings, MSEDCL is seeking inclusion and consideration of the

increased tariff arising from the Orders dated 3 and 4 September, 2013 also for the

re-determination of CSS upon remand. However, the Commission is of the view that

now including the impact of other Orders also for calculating ‘T’, which was not part

of the original Order dated 29 October, 2013, is beyond the scope of the remand

ordered by the ATE. Moreover, MSEDCL is revenue-neutral in this regard since the

impact has already been passed on in the truing-up for FY 2013-14 which has been

separately concluded. Hence, the Commission has not accepted MSEDCL’s prayer for

re-determination of the CSS computed in the Order dated 29 October, 2013 for the


above period inclusive of the impact of the Orders dated 3 and 4 September, 2013.

31. During these proceedings, the Commission, vide its Daily Order dated 31 May, 2016,

directed MSEDCL to refund the CSS recovered on the basis of the Order dated 29

October, 2013 as that Order had been set aside by the ATE. Now, after the due

process of public consultation, the Commission has confirmed the CSS determined to

reflect the increased ABR on account of AEC-1 and AEC-2 in the Order dated 29

October, 2013 in Case No. 107 of 2013 as correct, and applicable for the period from 1

September, 2013 to 28 February, 2014. Hence, MSEDCL may recover such refunded

amounts, if any, from the respective OA consumers.

The Petition of Maharashtra State Electricity Distribution Co. Ltd. in Case No. 17 of

2015 stands disposed of accordingly.

Sd/- Sd/-

(Deepak Lad) (Azeez M. Khan)

Member Member


Annexure-I

List of Objectors

Sr. No. Name and Organisation

1 Sterlite Technologies Limited, Aurangabad

2 TechNova Imaging System (P) Ltd, Mumbai

3 Indo Rama Synthetic (India) Limited, Nagpur

4 Piaggio Vehicles Private Limited, Pune

5 Videocon Industries Ltd., Aurangabad

6 Sudarshan Chemical Industries Ltd, Roha, Distt. Raigad

7 The Institution of Engineers (India), Mumbai

8 Asahi India Glass Ltd, Taloja MIDC, Distt. Raigad

9 WNS Global Service Pvt. Ltd, Pune


Annexure II

Computation of Cross Subsidy Surcharge applicable from 1 September, 2013 to 28 February, 2014, as approved by Commission

Consumer Category ABR C WL TL L D

CSS

Computed

CSS

Approved

(Rs./Unit) (%) (%) (%) (Rs./Unit) (Rs./Unit) (Rs./Unit)

HT Consumers (66kV and

Above)

Industry

Express Feeder 8.80 5.81 0.00% 4.19% 4.19% 0.00 2.75 2.75

Non Express Feeder 8.31 5.81 0.00% 4.19% 4.19% 0.00 2.26 2.26

Seasonal Industry 10.18 5.81 0.00% 4.19% 4.19% 0.00 4.13 4.13

Commercial

Express Feeder 13.27 5.81 0.00% 4.19% 4.19% 0.00 7.22 7.22


Railways 8.95 5.81 0.00% 4.19% 4.19% 0.00 2.90 2.90

Public Water Works

Express Feeder 6.36 5.81 0.00% 4.19% 4.19% 0.00 0.30 0.30


Bulk Supply

Residential Complex 6.23 5.81 0.00% 4.19% 4.19% 0.00 0.18 0.18

Commercial Complex 6.25 5.81 0.00% 4.19% 4.19% 0.00 0.20 0.20

HT-IX Public Services

Express feeders 10.70 5.81 0.00% 4.19% 4.19% 0.00 4.65 4.65

Non-Express feeders 10.07 5.81 0.00% 4.19% 4.19% 0.00 4.01 4.01

HT Consumers (33kV)

Industry

Express Feeder 8.80 5.81 6.00% 4.19% 9.94% 0.11 2.30 2.30





CSS

Computed

CSS

Approved


Commercial

Express Feeder 13.27 5.81 6.00% 4.19% 9.94% 0.11 6.77 6.77


Railways 8.95 5.81 6.00% 4.19% 9.94% 0.11 2.45 2.45

Public Water Works

Express Feeder 6.36 5.81 6.00% 4.19% 9.94% 0.11 -0.14 -


HT-IX Public services

Express feeders 10.70 5.81 6.00% 4.19% 9.94% 0.11 4.21 4.21


HT Consumers (22/11 kV))

Industry

Express Feeder 8.80 5.81 9.00% 4.19% 12.81% 0.60 1.65 1.65



Commercial

Express Feeder 13.27 5.81 9.00% 4.19% 12.81% 0.60 6.12 6.12


Railways 8.95 5.81 9.00% 4.19% 12.81% 0.60 1.80 1.80

HT-IX Public Services

Express feeders 10.70 5.81 9.00% 4.19% 12.81% 0.60 3.55 3.55


LT Consumers

Non-Residential

Up to 20 kW

0-200 Units 8.10 5.81 12.50% 4.19% 16.17% 1.03 0.32 0.32



CSS

Computed

CSS

Approved


Above 200 units 12.48 5.81 12.50% 4.19% 16.17% 1.03 4.70 4.69

'> 20 kW & < 50kW' 11.58 5.81 12.50% 4.19% 16.17% 1.03 3.80 3.79

Above 50kW 14.45 5.81 12.50% 4.19% 16.17% 1.03 6.67 6.67

Industry

Below 20kW load 6.10 5.81 12.50% 4.19% 16.17% 1.03 -1.69 -

Above 20kW load 9.74 5.81 12.50% 4.19% 16.17% 1.03 1.97 1.96

Residential

0-100 Units 4.45 5.81 12.50% 4.19% 16.17% 1.03 -3.33 -

101-300 Units 7.51 5.81 12.50% 4.19% 16.17% 1.03 -0.27 -

301-500 Units 9.37 5.81 12.50% 4.19% 16.17% 1.03 1.59 1.58

500 -1000Units 10.17 5.81 12.50% 4.19% 16.17% 1.03 2.40 2.39

above 1000 units 10.26 5.81 12.50% 4.19% 16.17% 1.03 2.49 2.48

Advertisements 26.76 5.81 12.50% 4.19% 16.17% 1.03 18.98 18.97

Temporary - Others

Other Purpose 17.83 5.81 12.50% 4.19% 16.17% 1.03 10.06 10.06

LT Public Services

Up to 20 kW

0-200 Units 6.37 5.81 12.50% 4.19% 16.17% 1.03 -1.41 -

>200 units 9.55 5.81 12.50% 4.19% 16.17% 1.03 1.78 1.77

>20-50 KW 10.82 5.81 12.50% 4.19% 16.17% 1.03 3.05 3.05

>50 KW 11.41 5.81 12.50% 4.19% 16.17% 1.03 3.63 3.62

before the maharashtra electricity regulatory commission 58 42/order-17 of 2015-08112016.pdf ·...

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