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Prayas submission regarding MSEDCL mid-term review petition before the MERC in case no 195 of 2017

Author(s): Prayas (Energy Group) Publication Date: August, 2018

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has submitted a petition seeking final true up for FY 15-16 & FY 16-17, provisional true up for FY 17-18 and mid-term review for FY 18-19 to FY 19-20 under the case 195 of 2017. The Maharashtra Electricity Regulatory Commission (MERC) vide its tariff order in the case no 48 of 2016 had approved a certain cost and tariff trajectory for MSEDCL for FY 2016-17 to FY 2019-20. The petition in case no 195 of 2017 is a mid-term review of the said tariff order and the directives issued thereunder.

In this petition (case no 195 of 2017), MSEDCL has proposed an increase of Rs. 23,658 crores over and above the tariff that was approved in the Multi-year tariff order in case no 48 of 2016.

A public hearing in this regard was conducted by the MERC in Pune on 9th August 2018. Prayas participated in the hearing and made a submission, which is attached below. The salient features of PEG’s submission are as follows:

  • Highlighting several lacunae in the methodologies proposed by MSEDCL, PEG has demanded that it is the commission’s responsibility to provide an independent, rigorous and credible methodology for estimation of unmetered agricultural sales and hence the distribution losses. It is also submitted that till the time that such an exercise is not undertaken, the agricultural sales and distribution loss trajectory approved by Commission in case no 48 of 2016 should continue to be followed.
  • Suggestions regarding tariff design that can be implemented to protect the interests of small consumers and also for improving the distribution company’s accountability in issues concerning supply and service quality.
  • Comments and suggestions regarding issues such as, determination of cross-subsidy surcharge, applicability for additional surcharge for captive consumers, treatment of rooftop solar and net-metered consumers, separate tariff for electric vehicles, changes in billing demand definition, moving to kVAh based billing, introduction of rebate of Rs. 1/unit for old and new industries etc. are provided.
  • Underlining the need to think of innovative ways to ensure that backed down capacity is available when needed, PEG demanded that the MERC should undertake an independent and analysis of whether the flexibility in coal supply management that is allowed to the generating companies is indeed leading to cost savings. Given the uncertainty in demand and supply, need for better estimation of seasonal and diurnal variation in shortage and surplus using advanced tools and models is also highlighted.
  • Considering the increasing sales migration and shrinking room for increase in cross-subsidy, PEG feels that the current utility business model is at crossroads. There is an urgent need for re-imagining this business model while ensuring a smoother transition for the small consumers. For this purpose, PEG has urged the MERC to come out with a white paper that reimagines the future of the distribution sector and open a fresh debate and discussion in this regard.

The submissions made by Prayas at the Pune public hearing is attached below. PEG submission regarding the original Multi-year tariff petition (case no 48 of 2016) can be seen here.

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