The Maharashtra Electricity Regulatory Commission (MERC) has dismissed a petition filed by Sanyo Special Steel Manufacturing India Pvt. Ltd. (SSSMIPL) against Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) over the priority adjustment of open access energy credits.
SSSMIPL, a partial Open Access consumer, had filed the petition in March 2025, challenging MSEDCL’s energy billing methodology for the period from September 2024 to January 2025. The company procures electricity from a captive solar power plant as well as several non-captive renewable energy sources.
The petitioner argued that MSEDCL was giving priority to energy supplied by non-captive third-party renewable generators over electricity generated by its captive solar plant. According to SSSMIPL, captive renewable energy should receive the highest priority within the renewable energy category.
The company said the billing methodology could affect its compliance with Rule 3 of the Electricity Rules, 2005, which requires a captive user to consume at least 51% of the electricity generated by its captive generating plant. SSSMIPL claimed that the adjustment method resulted in its captive solar energy being pushed into grid banking, leading to an 8% banking loss and the automatic lapse of unused energy.
SSSMIPL further stated that the methodology caused financial losses of around Rs. 6.40 lakh per month and could put its captive status and eligibility for cross-subsidy surcharge exemptions at risk.
MSEDCL opposed the petition and maintained that its billing process was fully compliant with Regulation 14.10 of the MERC Distribution Open Access First Amendment Regulations, 2019. The distribution company pointed out that the regulation establishes a specific priority sequence, with Renewable Energy Generators listed under clause (a) and Captive Generating Plants under clause (b).
MSEDCL argued that pro-rata adjustment applies only among generators within the same category. It said the regulations do not provide any special priority to captive renewable energy over third-party renewable energy. The distribution company also maintained that ensuring the 51% captive consumption requirement is the responsibility of the consumer and not the distribution licensee.
In its order dated September 7, 2026, the Commission, comprising Chairperson Valsa Nair Singh and Members Anand M. Limaye and Surendra J. Biyani, rejected SSSMIPL’s prayers.
MERC observed that Regulation 14.10 clearly places Renewable Energy Generators and Captive Generating Plants in separate statutory categories with a defined order of priority. The Commission also referred to the Statement of Reasons accompanying the 2019 amendments, noting that proposals to provide higher priority to captive renewable energy had already been considered and rejected.
The Commission clarified that the pro-rata adjustment provision cannot be used to combine or rearrange separate categories. It also rejected SSSMIPL’s reliance on purposive and beneficial interpretation, stating that these principles apply only where statutory provisions are unclear.
MERC concluded that MSEDCL’s energy credit adjustment methodology complied with the applicable regulations. It held that any commercial losses, lapsed banked energy or risks to captive status arose from SSSMIPL’s own procurement and scheduling decisions.
Accordingly, the Commission dismissed the petition and rejected the company’s claims for financial compensation, bill revisions and legal costs.
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