APTEL Order Adds Clarity On Treating Open Access Demand By Grid Operators

In an order last week that will add a dash of clarity on how discoms treat demand from open access customers, the APTEL bench has ruled to set aside an order from MSEDCL where it had denied the open access quantum to a group of customers of Sai Wardha Power Generation Limited. MSEDCL had lost the case at MERC, and hence escalated the matter to APTEL. While in this case, it involves customers of a thermal plant operator, the order does have ramifications for green energy consumers as well, with its upholding of open access rights.

• Parties Involved: The case involves Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) appealing against an order by the Maharashtra Electricity Regulatory Commission (MERC). Other parties include INOX Air Products Pvt. Ltd., Sai Wardha Power Generation Limited (SWPGL), and several other companies.
• Issue: The main issue is the cancellation and reduction of short-term open access (STOA) granted to SWPGL’s consumers by MSEDCL, which was challenged by SWPGL. MSEDCL’s logic or presumption was that the power demand from these open access consumers was over and above their contracted demand, thus ‘risking’ grid stability.
• Commission’s Decision: MERC set aside the retrospective cancellation of STOA and held that MSEDCL should not have reduced or denied the open access quantum based on unilateral assumptions.
• Tribunal’s Ruling: The Appellate Tribunal for Electricity upheld MERC’s decision, stating that open access power should be subsumed within the contract demand and not treated as additional demand. The appeal by MSEDCL was dismissed.

Overall, while the case is more about regulatory compliance, its outcomes can positively influence the adoption and integration of renewable energy, contributing to environmental sustainability. It also makes it clear about the situations where Short Term Open Access can be provided.

To quote, “It is always open to the consumers to apply for Long Term Open Access and require augmentation of the system. Had the Open Access Applicant applied for Long Term Access, MSEDCL could have considered augmentation required for accommodating the requirements. However, the Open Access Applicant has chosen not to apply for long term access and therefore the request has to be considered as per the existing capacity. Further the distribution licensees and long term open access users contribute to the capital cost of the transmission line as well as for its upgradation. The short term open access users do not contribute towards capital cost. By its very nature, the short term users will be given open access only for the margin available after meeting the requirements of distribution licensee and thereafter the long term users and subject to the priority of even the medium term users.“

Similarly, the order also makes it very clear that there can be no substitution of contracted demand with open access. “Otherwise, every consumer with contract demand can seek substitution with open access and there can be no constraint in the network irrespective of where the injection point is. This would lead to chaos in the transmission and distribution system as power flow cannot be then controlled by operation of the generating station of the distribution licensee or otherwise by varying the injection point.” 

Importantly, it clarifies that “an Application for Open Access shall not be rejected on the ground that the consumer has not increased or otherwise revised his Contract Demand, which is entirely at his option. However, the Regulations also provide that the Distribution Licensee verify the availability of necessary infrastructure and capacity of the distribution system, and grant Medium or Short-Term Open Access only if the resultant power flow can be accommodated in the existing distribution system. If the existing distribution and metering system requires any augmentation or upgradation before Open Access to the extent applied for can be provided, it shall intimate the Applicant accordingly, in writing and in the stipulated time, and follow the procedure specified in the Electricity Supply Code and Standards of Performance Regulations.” 

All important points that are bound to be cited in many future cases.