MERC Implements First Amendment To Business And Fees Regulations, Raising License Fees To Tackle Sector Challenges

The Maharashtra Electricity Regulatory Commission (MERC) has made amendments to its regulations concerning business transactions and fees. The original regulations, established in 2004, were reviewed in 2017, and then again in 2022. These changes are aimed at keeping up with the evolving challenges in the electricity sector, particularly the growing workload due to new regulations, studies, and legal cases.

One significant change proposed is an increase in the annual license fees for distribution licensees, raising it from 0.05% to 0.1% of their revenues. The minimum annual fee has also been increased from ₹2 lakh to ₹5 lakh. Various stakeholders, including Adani Electricity Mumbai Ltd. (AEML), EON Kharadi Infrastructure Pvt Ltd., and the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL), have expressed concerns about the financial impact of this fee hike. They argue that it would place a heavy burden on both the licensees and consumers, potentially leading to higher tariffs.

MERC has considered these objections but decided to retain the proposed fee increase, stating that the additional funds are necessary to manage the increasing complexities in the sector. The commission has justified this decision by highlighting its growing responsibilities, which include regulatory studies, legal cases, and the promotion of renewable energy.

Additionally, MERC has implemented various digital initiatives and plans to expand its workforce to handle the increased workload. The amendments will take effect from the 2025-26 financial year, aligning with the new Multi-Year Tariff (MYT) period.

Please view the document here for more details.