MERC Orders Increase In Licence Fees For Maharashtra Discoms

MERC Orders Increase In Licence Fees For Maharashtra Discoms

The Maharashtra Electricity Regulatory Commission (MERC) has now decided to increase the annual licence fees for discoms, paid to the state power regulator. These charges are paid by the state discoms under the MERC (Fees and Charges) Regulations. The state power commission passed the order after hearing the arguments of the stakeholders on the matter, after earlier issuing a draft regulation in this regard.

The power regulator said that on account of increase in the number of cases related to the electricity and in order to augment its capacity, the increase in the fees was needed.

MERC said that considering the evolution of the electricity sector at both the National level and State levels, it is expected that there will be increased challenges and workload, in terms of framing various Regulations, implementation and studies, in future to deal with future complex issues.

“Considering the existing workload, future workload and various digital initiatives taken post Covid-19 pandemic, the Commission proposed to revise the Annual Licence Fees payable by the Distribution Licensees from existing 0.05% of their revenues, excluding taxes and duties, from the wheeling and sale of electricity to 0.1% of the corresponding revenues through the draft Maharashtra Electricity Regulatory Commission (Transaction of Business and Fees and Charges) (First Amendment) Regulations, 2024,” the commission said.

Several discoms in the state including MSEDCL, Adani Electricity Mumbai Ltd-Distribution (AEML-D), EON Kharadi Infrastructure Pvt LTd (EON) and TPC-D objected to the rise and asked the state panel to reconsider the proposal. Some of these discoms also hinted at the likely increased burden of the same on the consumers with the decision. MERC, however justified its demanded and declined to give any relief on this matter.

As per the order of the MERC, the new regulation will come in force from the next fiscal year. “…the Commission is of the view that the increase in the Annual Licence Fees for the Distribution Licensees from existing 0.05% to 0.1% as proposed in the Draft Amendment is justified and does not require a reconsideration,” the MERC order said.

The final order of the MERC read, “The Commission accepts the submission of AEML-D as revised Licence Fees shall commence from and coincide with the new MYT control period commencing from FY 2025-26. In any case, the Distribution Licensees have already paid the Annual Licence Fees for FY 2024-25 based on the principal Regulations and next the Licence Fees shall be payable for FY 2025-26 commencing from 1 April 2025.”