APTEL to MSEDCL: ‘Conventional Power First, Renewables Later’ in Open Access Billing

In its latest order, the Appellate Tribunal for Electricity (APTEL) has underlined a key principle for open access billing. This came after an open access consumer approached the apex authority for its intervention against an order passed by the Maharashtra Electricity Regulatory Commission (MERC). APTEL clarified that conventional power must be adjusted first, followed by renewables, in the case of open access.

The ruling paves the way for bringing in more clarity for the industrial consumers in Maharashtra who are using both the conventional sources of energy and renewable power for their captive needs. The tribunal struck down the impugned order passed earlier by the Maharashtra Electricity Regulatory Commission (MERC). It directed state utility MSEDCL to refund excess recoveries from Mahindra CIE Automotive, the petitioner in the case with 9% annual interest.

APTEL’s verdict reiterates that since conventional power — whether sourced from captive plants or independent producers — is schedulable, firm and non-bankable, it must always be consumed before renewable energy, which is infirm and bankable only on a “must-run” basis.

Background of the Case

The dispute arose when MSEDCL altered its billing method in May 2016, crediting renewable energy first and pushing conventional captive power behind. This reversal meant Mahindra CIE lost out, as unused conventional power could not be banked.

MERC had already clarified in 2017 that captive conventional power must be set off first, and reaffirmed it in 2018 while directing MSEDCL to correct its billing. However, in 2019, MERC diluted its stance, drawing a distinction between captive and independent conventional power, and declined Mahindra CIE’s claim for interest.

Tribunal’s Findings

Calling MERC’s reasoning “cryptic” and “absolutely erroneous,” APTEL said the regulator had gone beyond its remit by revisiting settled issues under the guise of execution. The tribunal rejected the “artificial” distinction between captive and independent conventional power, stressing that the nature of conventional supply remains the same regardless of source.

"For the above-noted reasons, we find merit in the instant appeal and the same hereby succeeds.  The impugned order of the Commission is found to be absolutely erroneous and is hereby set aside," the APTEL order said.   

It also came down heavily on MERC for denying interest, pointing out that interest is a “necessary corollary” when a consumer is deprived of the use of their own money.

Next Steps

MSEDCL has now been ordered to:

• Follow the 2017 billing methodology — conventional power first, renewables later — for the post-April 2018 period.

• Refund the excess billed amounts to Mahindra CIE within a month, along with 9% carrying cost.

• Face a rehearing at MERC for the pre-March 2018 period, where APTEL has sought a fresh, reasoned order.

The ruling sends a clear signal that regulatory directions, once finalised, cannot be revisited in execution proceedings. For the industry, it underscores a critical learning: in open access billing, conventional power enjoys first right of adjustment over renewable energy.