100KW Open Access Limit Not Applicable to Captive Consumers: MERC

It may be recalled that in May, the Ministry of Power has asked all the State Electricity Regulatory Commissions (SERCs) to notify green tariffs under the Green Energy Open Access Regulations. Heeding the request, MERC has introduced the draft notification on Green Energy Open Access. 

The MERC (Maharashtra Electricity Regulatory Commission) DOA Regulations pave the way for various provisions on banking, different charges for open access consumers, etc.

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has submitted that there are no specific regulations or guidelines for implementing open access to consumers below 1 MW. To implement the proposed amendment, pilot studies should be conducted to create a suitable environment. The limit can be lowered in a phased manner based on pilot studies. MSEDCL can manage demand, energy accounting, and billing for 1 MW and above consumers under the existing arrangement. However, abruptly lowering the limit to 100 kW without clear procedures will create difficulties in billing, energy accounting, and settlement.

The existing open access transaction settlement system requires 15-minute time blocks for energy accounting and billing, and scheduling power on a day-ahead basis. Hence, detailed guidelines and procedures for implementing Green Energy Open Access should be prescribed by the Commission.

Captive Consumers

It is also clarified that threshold limit of 100 kW to become eligible for seeking Green Energy Open Access is not applicable to captive consumers. They can opt for Open Access, even if their contract demand or sanctioned load is lower than 100 kW and can source renewable energy more than their contract demand or sanctioned load subject to complying with requirement of resultant power flow. It has been clarified that captive consumers include group captive consumers formed through SPV or appropriate entity as per the applicable rules.

However, it may be noted that the eligibility criteria is contract demand or sanctioned load of 100 kW or more, hence, there is no bar on consumers having load more than 100 kW procuring green power through Open Access from third party.

Surcharge

The subsidy surcharge has been restricted to 1.5x for a period of 12 years from commissioning. There will be no CSS and additional surcharge for Waste to Energy based open access and for procurement of energy for production of Green Hydrogen and Green Ammonia production. At the same time, additional surcharge shall not be applicable in case of electricity produced from offshore wind projects, which are commissioned up to December, 2032 and supplied to the Open Access consumers.

Banking

Maharashtra may have to brace for an increase in banking charges on open access from the present 2% to 8%. Any surplus un-utilized banked energy shall lapse at the end of each banking cycle.

What stands out in the notification is that generators shall be entitled to get RECs to the extent of the lapsed banked energy.

Recently, The Gujarat Electricity Regulatory Commission (GERC), in its suo motto order specified the additional surcharge rate for the open access consumers in the state. As per the latest order of the state, it has specified Rs 0.87 per KwH applicable for open access services between October 1, 2023, and March 31, 2024.

MERC’s notification on Open Access also resonates with KERC’s Open Access Rules that says there should be no limit on the power supply for the captive consumers taking power under this mode.

Maharashtra has emerged as a favourable site for captive projects with Tata Power Renewable Energy Limited establishing several projects in the state. Once finalised, the order with no limitation on captive projects will further encourage smaller players to set up such projects in the state and seek benefits.