APTEL Directs Compensation For Surplus Wind Power Injected Into Maharashtra Grid

The Appellate Tribunal for Electricity (APTEL) has set aside an order of the Maharashtra Electricity Regulatory Commission (MERC) that denied compensation to Serum Institute of India Private Limited (SIIPL) for surplus wind power injected into the state grid. The Tribunal directed MERC to determine the amount payable to SIIPL by Maharashtra State Electricity Distribution Company Ltd. (MSEDCL), along with applicable carrying costs.

SIIPL operates wind power plants with a combined capacity of 57.2 MW across Dhule, Sangli, and Satara districts of Maharashtra. The electricity generated by these projects is primarily used for captive consumption, while the remaining power is supplied to third-party consumers through Open Access (OA).

During the period from April 2016 to March 2018, restrictions affecting OA consumers resulted in surplus wind energy being generated and injected into the grid. SIIPL stated that a total of 3,67,58,630 units of wind energy were injected during the two financial years. This included 1,69,26,475 units in FY 2016-17 and 1,98,32,155 units in FY 2017-18.

According to SIIPL, the surplus energy was recorded through Joint Meter Readings. However, MSEDCL later declined to purchase the surplus power or process credit notes relating to SIIPL’s Group-IV wind projects.

SIIPL subsequently approached MERC through Case No. 49 of 2019 seeking compensation. MERC rejected the claim in its order dated May 30, 2019. SIIPL then challenged the decision before APTEL.

Before the Tribunal, SIIPL argued that MSEDCL had benefited from the electricity injected into the grid and that denying payment amounted to unjust enrichment under Section 70 of the Indian Contract Act, 1872. It also highlighted the Must-Run status applicable to renewable energy projects.

MSEDCL argued that the surplus electricity constituted infirm power and that, under the MERC Distribution Open Access Regulations, 2016, excess power injected without a prior agreement did not create any financial entitlement. It also cited concerns related to grid discipline and safety.

APTEL rejected the argument that the electricity should be treated as infirm power. The Tribunal observed that SIIPL’s wind plants were commercially operational and had valid Open Access approvals during the relevant period. It also noted that MSEDCL had not produced evidence of any curtailment instructions issued to SIIPL due to grid-related concerns.

The Tribunal further held that subsequent regulatory orders could not override regulations applicable during the period in dispute.

APTEL relied on Regulation 20.6 of the MERC Distribution Open Access Regulations, 2016, which provides that unutilized banked renewable energy at the end of a financial year, subject to the prescribed limit of 10% of annual generation, is to be treated as deemed purchase by the distribution licensee at the Pooled Cost of Power Purchase.

The Tribunal concluded that MERC had failed to enforce the mandatory provision and allowed Appeal No. 294 of 2019. The matter has been remanded to MERC to calculate the compensation payable to SIIPL for the eligible deemed purchase quantum, along with applicable carrying costs.