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MERC Order in Case No. 54 of 2016 Page 1 of 20
Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400005
Tel. 022 22163964/65/69 Fax 22163976
E-mail: [email protected]
Website: www.mercindia.org.in / 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 …..Petitioner
V/s
1.Maharashtra State Electricity Transmission Co. Ltd.
2.Tata Power Company Ltd. (Distribution)
3.Mahindra and Mahindra Ltd. …. Respondents
Appearance
For the Petitioner : Shri Anand K. Ganesan (Adv)
For Respondent 1 : Shri R. N. Farkade
For Respondent 2 : Ms. Swati Mehendale
ORDER
Dated: 23 April, 2018
M/s Sai Wardha Power Limited (SWPL) (formerly Wardha Power Company Ltd. (WPCL)),
8-2-293/82/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 2 of 20
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 3 of 20
(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, 2014.
3.4 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, 2005.
3.7 The Commission notified the Distribution Open Access (DOA) Regulations, 2014
on 26 June, 2014. 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.
3.10 TPC-D has billed and levied Transmission Charges on the Open Access supply
taken by MML for May, 2014. 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, 2014.
MERC Order in Case No. 54 of 2016 Page 4 of 20
3.11 The above recovery by MSETCL is contrary to the DOA Regulations, 2014. 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.
3.12 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.
3.13 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, 2014. 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, 2011.
4.2 As per the MERC (Transmission Open Access) Regulations (‘TOA Regulations’),
2005, BPTA was executed between SWPL and MSETCL for allocation of 135.15 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 135.15 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 135.15 MW.
4.4 As per Clause 7.1.1 of BPTA, SWPL is liable and agreed to pay Transmission Charges
for the allotted TCR of 135.15 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.
2.63 crore.
MERC Order in Case No. 54 of 2016 Page 5 of 20
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, 2014.
4.7 MML approached MSETCL with regard to double recovery of Transmission Charges
vide letters dated 11 August and 12 September, 2014. 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.
4.10 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.
4.11 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, 2014.
4.12 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 6 of 20
4.13 The BPTA was executed as per the provisions of the TOA Regulations, 2005 and also
considering the DOA Regulations, 2005. 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.”
4.14 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 135.15 MW. The billing by TPC-D
is unilateral and SWPL has sought refund of the excess Transmission charges.
4.16 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 7 of 20
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 2016.
5.4 The Transmission Charges were computed based on the demand of Distribution
Licensees including the demand of embedded partial Open Access consumers till FY
2015-16. 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, 2016.
MERC Order in Case No. 54 of 2016 Page 8 of 20
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
135.15 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 135.15 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 9 of 20
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, 2016. 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,. 2016. 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 135.15 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 10 of 20
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, 2018.
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 135.15 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
135.15 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 135.15 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, 2016.
Either of the one complete process of DOA Regulations, 2016 or BPTA will
have to be followed with effect from 1st April, 2016.
7.3 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 11 of 20
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 135.15 MW.
ii. 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.
iii. 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 135.15 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, 2016.
ii. As requested by SWPL the BPTA needs to be amended to include new
consumers of SWPL to fulfil the allocated capacity of 135.15 MW.
iii. 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 135.15 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 12 of 20
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.2,07,58,432.66 as per
Regulation 15.2(v) of the DOA Regulations, 2014.
2) 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 135.15 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 13 of 20
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 31.03.2016 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 e-mail
dated 08 November, 2016 amount for arrears reconciliation up to March,
2016.
2) By e-mail 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 2016.
8. On 23 February, 2017, the Commission heard this matter along with Case No. 107 of
2016.
8.1 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 14 of 20
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, 2016.
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 135.15 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, 2016. Based on the deliberations
and discussions, a report with STU’s observations and recommendations has been
submitted to the Commission on 16 December, 2016.
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 2016.
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 2016.
8.5 SWPL and TPC-D were allowed to file their submissions within two weeks.
MERC Order in Case No. 54 of 2016 Page 15 of 20
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 1st April 2016.
9.2 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, 2016.
9.3 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, 2014. 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 16 of 20
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 2014-15,
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 2014-15. TPC-D has filed a
Review Petition challenging the above issue and it is pending adjudication before the
Commission.
9.10 The STU's recommendation that TPC-D should refund the Transmission Charges
collected from MML is not correct.
9.11 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 17 of 20
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
135.15 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. 2.76 crore to the STU in
accordance with the BPTA for Capacity Rights of 135.15 MW. The relevant
provisions of the BPTA read as follows:
“And whereas:
…(c) Long Term Transmission Open Access capacity rights of 135.15 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)....
…3.1 …(iv) To make available 135.15 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….
...7.1.1 WPCL agrees to pay Transmission charges for 135.15 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, 2014.
14. 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 2015-16) 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 18 of 20
…66. Usage of Intra-State Transmission System—
...66.4 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...”
15. 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 19 of 20
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 20 of 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/- Sd/-
(Deepak Lad) (Azeez M. Khan)
Member Member
