APTEL directs MSEDCL to pay for eligible surplus wind power under Maharashtra’s renewable-energy banking rules

Serum Institute of India Pvt. Ltd. (“SIIPL”) operated wind-energy generating stations with an aggregate capacity of approximately 57.2 MW in Maharashtra, primarily for captive consumption and third-party sales through Open Access (“OA”).

During FY 2016–17 and FY 2017–18, reduced utilisation by OA consumers resulted in surplus wind energy being injected into and banked with the Maharashtra State Electricity Distribution Co. Ltd. (“MSEDCL”). SIIPL claimed purchase of 1,69,26,475 units for FY 2016–17 and 1,98,32,155 units for FY 2017–18, supported by credit notes, Common Credit Reports and Joint Meter Readings.

MSEDCL declined to purchase the claimed energy. SIIPL approached the Maharashtra Electricity Regulatory Commission (“MERC”), which rejected its claim by order dated 30 May 2019 in Case No. 49 of 2019.

Whether the surplus renewable energy injected by SIIPL into MSEDCL’s grid was governed by Regulation 20 of the DOA Regulations, 2016 and was required to be banked and treated as deemed purchase in accordance with Regulation 20.6

Whether Regulations 5.10.5 and 8.10 of the DOA Regulations, 2016 prohibited or otherwise justified MSEDCL’s refusal to recognise the excess energy injected by SIIPL

Whether SIIPL could claim compensation under Section 70 of the Indian Contract Act, 1872 on the ground that MSEDCL had obtained the benefit of the injected energy

Whether considerations of grid discipline and the absence of specific prior consent disentitled SIIPL from claiming treatment of the surplus energy under the DOA Regulations, 2016

The Tribunal held that statutory regulations governing electricity transactions have the force of law and determine the rights and obligations of the parties; contractual or restitutionary principles cannot be invoked to circumvent them, relying on PTC India Ltd. v. CERC, (2010) 4 SCC 603.

Under Regulations 20.2–20.6 of the DOA Regulations, 2016, surplus energy from a non-firm renewable-energy generating station is to be banked with the distribution licensee, and unutilised banked energy at the end of the financial year, limited to 10% of the generator’s actual annual generation, is to be treated as deemed purchase by the distribution licensee at the applicable pooled cost of power purchase.

Regulation 5.10.5 concerns infirm power injected during testing before commercial operation, while Regulation 8.10 concerns grant of OA where the resulting flow can be accommodated; neither provision governs excess injection by an already operational generating station with existing OA.

Regulation 29 permits curtailment of OA subject to the State Grid Code, but grid-security concerns must be supported by applicable directions or instructions.

Section 70 of the Indian Contract Act, which provides restitution where a person lawfully does something for another without intending to act gratuitously and the other person enjoys the benefit, was not required to be examined because the transaction was specifically governed by the DOA Regulations, 2016.

The Tribunal found that SIIPL’s wind plants were commercially operational and had been granted OA; therefore, the energy in question could not be characterised as “infirm power” under Regulation 5.10.5, which applies to testing and commissioning before commercial operation.

Regulation 8.10 likewise operated at the stage of granting OA and did not prohibit excess injection after OA had already been granted.

Regulation 20 directly applied because it expressly required surplus renewable energy to be banked and prescribed its treatment at the end of the banking year. Accordingly, MSEDCL was required to treat the eligible unutilised banked energy as deemed purchase under Regulation 20.6.

The Tribunal rejected the reliance on grid discipline because there was no evidence that SIIPL had violated any specific direction to restrict generation or injection, and Regulation 29 itself contemplated curtailment during operation where justified under the Grid Code.

Orders relied upon by MERC and MSEDCL were issued after the relevant period and concerned different circumstances, including injection without an agreement.

Since Regulation 20 provided a complete statutory mechanism, the Tribunal held that past practice, absence of consent, MSEDCL’s alleged lack of awareness, and Section 70 of the Contract Act could not alter the prescribed regulatory treatment.

The matter was remanded to MERC to determine the amount payable by MSEDCL for the appropriate quantum of excess energy in accordance with the DOA Regulations, 2016, together with carrying cost.

The Tribunal therefore affirmed that Regulation 20.6 required deemed purchase of the qualifying unutilised banked energy, subject to the regulatory limit of 10% of the generator’s actual total annual generation.