CASE No. 129 of Coram. Shri Azeez M. Khan, Member Shri Deepak Lad, Member. M/s Maharashtra Seamless Limited

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1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: / www. merc.gov.in CASE No. 129 of 2014 In the matter of Petition of Maharashtra Seamless Ltd. for adjustment of banked energy of its Vile Bhagad Industrial Plant for its Sukeli Plant. Coram Shri Azeez M. Khan, Member Shri Deepak Lad, Member Petitioner: Respondents Appearance For the Petitioner M/s Maharashtra Seamless Limited Maharashtra State Electricity Distribution Co. Ltd Maharashtra Energy Development Agency : Ms. Dipali Sheth, (Adv.) For the Respondents : 1. Smt. Deepa Chawan (Counsel), MSEDCL 2. Shri. P. H.Jambulkar (Rep.), MSEDCL 3. Shri Manoj Pise (Rep.), MEDA ORDER Date: -6 April, M/s Maharashtra Seamless Ltd. (MSL), 402, Sarjan Plaza, 100, Annie Besant Road, Worli, Mumbai, has filed a Petition on 30 June, 2014 seeking the adjustment of banked energy units from its Industrial Plant at Vile Bhagad Industrial Area towards its other Plant at Sukeli, citing the provisions of the Electricity Act (EA), 2003 and Rules read with the MERC (Distribution Open Access) Regulations, 2005 ( the DOA Regulations, 2005 ) and the Commercial Circular No. 194 dated April 9, 2013 of the Maharashtra State Electricity Distribution Co. Ltd. 2. In its Petition, MSL has prayed as follows:- MERC Order in Case No 129 of 2014 Page 1 of 15

2 (a) Direct Respondent No. 1 to allow the unadjusted units of the Vile Bhagad plant in the Energy Bills of the Sukeli plant to the extent of 46,43,684 units; (b) Direct Respondent No. 1 to amend the Open Access permission for the FY being effective from April 1, 2014 and in consonance with current regulatory regime; (c) Direct Respondent No. 1 to issue Credit Notes for wind units injected w.e.f April 1, 2014 immediately. (d) Award costs of these proceedings against the Respondent and in favour of the Petitioner; and (e) Pass such other order(s) as the Hon ble Commission may deem just in the facts of the present case. MSL has also sought as under: (a) Pass an ad-interim ex-parte order directing Respondent No. 1 to immediately adjust the banked units to the tune of 46,43,684 units; (b) Confirm the ex-parte orders after notice to the Respondents; and (c) Pass such other order(s) as the Hon ble Commission may deem just in the facts of the present case. 3. In its Petition and further submission dated 11 November, 2014, MSL has submitted that: (1) MSL has steel pipes manufacturing Plants at Sukeli and Vile Bhagad, in Raigad District. Both Plants are Extra High Tension (EHT) consumers of MSEDCL. MSL also has a Wind Energy plant in Satara District for self-use through express feeders since (2) Contract Demand of the Sukeli Plant was MVA. MSL s Wind Energy Plant at Satara was commissioned under the special incentive scheme (Wind Power Policy) of the Government of Maharashtra (GoM) dated 12 March, 1998 to promote Wind Energy. Out of total Contract Demand of MVA, MSL was consuming 7 MVA from its Wind unit for its Sukeli Plant, and the balance from MSEDCL. (3) MSEDCL had granted Open Access (OA) permission to MSL from 13 December, 2001 till 12 December, 2012 for self-use of power generated from its windmill for its Sukeli Plant. (4) On 22 June, 2012, MSL entered into a Power Purchase Agreement (PPA) with JSW Energy Ltd. (JSW) for 6 MW power for its Sukeli Plant. Vide letter dated 14 May, 2012, MSL sought OA permission from MSEDCL to source power from JSW accordingly. MSL stipulated that the existing arrangement for credit of Windmill Generation will continue as hitherto. On 2 July, 2012, MSEDCL granted OA permission to MSL, wherein the existing arrangement of credit generation was neither denied nor disputed. MERC Order in Case No 129 of 2014 Page 2 of 15

3 (5) MSEDCL, while giving permission for OA vide letter dated 2 July, 2012, did not specify that sourcing of power from two generators or two source is not permitted. However, MSEDCL, vide letter dated 27 November, 2012 alleged that the MSL did not mention about sourcing of power from its own windmills. (6) MSL submitted that the OA application does not require the applicant to mention any details about sourcing of power from other sources or generators and hence, such allegation was baseless and unfounded. (7) On 29 December, 2012, MSEDCL informed MSL that, due to operational constraints sourcing of power from two sources is not permitted and hence, the energy from the windmill units could not be set off against the Sukeli Plant. (8) Vide its letter dated 29 December, 2012, MSEDCL forced MSL to change the drawal point from Sukeli to Vile Bhagad in order to source power from JSW Energy under partial OA. In view of the same, MSL was compelled to make an application for OA permission in favor of the newly established Vile Bhagad Plant on 12 December, (9) MSEDCL vide its letter dated 4 February, 2013 granted permission for change of user for sourcing power from wind generator in respect of Vile Bhagad Plant for the period 20 September, 2012 to 31 March, 2013 in terms of prior OA permission dated 4 January, Thereafter, on 21 February, 2014, MSEDCL granted OA permission to MSL s Sukeli Plant for consuming power from its own Wind Power Project to the tune of 7 MW. (10) Due to arbitrary acts of MSEDCL, MSL had to change user. MSL sought OA permission for its Sukeli Plant from MSEDCL for the period 1 April, 2013 to 31 March, 2014 for consuming power from JSW. MSEDCL granted OA permission to Petitioner s Sukeli Plant on March 28, 2013 for sourcing 6 MW. (11) In order to avoid any dispute, MSL availed OA for self-use for its Vile Bhagad Plant. MSL also availed banking of energy pursuant to current regulatory regime. In August, 2013, MSL realized that the Vile Bhagad Plant s consumption was much lower than the generation. Due to adverse market conditions, the relatively newer Plant at Vile Bhagad where the windmill units were adjusted earlier was unable to absorb the entire quantum, leading to accumulation of approximately 50 lakh unadjusted units already injected into the MSEDCL grid. Therefore, on 24 August, 2013, MSL requested MSEDCL for change of user to the Sukeli Plant. (12) Due to the constraints of Vile Bhagad Plant, MSL terminated the PPA with JSW on 14 February, 2014, and discontinued the cheaper power from JSW to avail the energy from its own Windmill unit. MSL then sought OA for self-use for its Sukeli Plant in order to adjust the unabsorbed accumulated units of the Vile Bhagad Plant banked with MSEDCL for FY by requesting a change of MERC Order in Case No 129 of 2014 Page 3 of 15

4 drawal point to Sukeli Plant from 15 February, 2014 vide letter dated 29 January, 2014, along with the requisite fees. MSEDCL granted the OA for self-use of Wind Energy vide letter dated 21 February, 2014 for the period from 15 February, 2014 till 31 March, (13) MSL thereafter had series of correspondence and meetings with MSEDCL seeking setting-off of the unadjusted Windmill units during FY from the Energy bills of the Sukeli Plant. The total quantum injected into the grid of MSEDCL was 51,16,875 units as on March 31, (14) MSL was orally communicated to make a distress sale of such unabsorbed units to MSEDCL at the rate of Rs per unit against the existing rate of Rs per unit. The banking facility has been provided to MSL by carrying forward of outstanding monthly units to the next month on year to year basis since 2001 when the Windmill was commissioned and, therefore, there has been no change in circumstances to deny the same on the ground of change of Consumer during (15) Vide its letter dated 7 June, 2014, MSL denied adjustment of banked units, and proposed that MSL opt for the cancellation of OA for February and March, 2014 in respect of changed drawal point and then opt for the sale of unavailed units to MSEDCL at Rs.2.52 per unit, which will cause loss to MSL to the extent of Rs Crore. (16) MSL applied for renewal of OA permission for FY in respect of wheeling of power to its Sukeli Plant vide its letter dated 10 March, On April 16, 2014, MSEDCL informed MSL that the OA permission shall be granted only upon installation of Special Energy Meter (SEM). (17) MSL installed SEM on 13 June, 2014 by incurring Rs lakh. Thereafter, vide its letter dated June 16, 2014, MSEDCL granted OA to the Sukeli Plant from 13 June, 2014 to 31 March, 2015, only from the date of installation of SEMs. MSEDCL stipulated in its OA permission dated 16 June, 2014 that, during the period of OA, the captive self-use consumer would not be allowed to change the location or drawal point and that, if such need arises, the consumer shall have the option to apply for sale to MSEDCL by discontinuing the OA: 4) During the validity of the Open Access permission, it is not allowed to change the Open Access consumer / its location or drawal point. The Open Access consumer is at a liberty to apply to MSEDCL for exercising the option of Sale to MSEDCL if he wants to discontinue the Open Access permission in between. (18) While granting the OA permission, MSEDCL has acknowledged the captive status of MSL. The fact that MSL s Plants are having two separate consumer numbers does not affect their captive user status. MERC Order in Case No 129 of 2014 Page 4 of 15

5 (19) There is no compulsion on the consumer to purchase 100% of the energy generated from a wind power project. As a captive user, when the Vile Bhagad Plant was unable to consume the injected units, it banked the same with the MSEDCL. However, when the same captive use was shifted to the Sukeli Plant capable of consuming the banked units, it was denied by MSEDCL. (20) In its Order dated 8 March, 2011 in Case No. 52 of 2010, the Appellate Tribunal for Electricity (ATE) held that, if there are no restrictions on the number of captive locations per Wind Energy Generator in a State s (Gujarat in that Case) Wind Power Policy, then any delay in allowing wheeling to desired locations is unjustified. Therefore, it can be inferred that the same principle is applicable to other incidences of OA, such as banking in respect of two different locations (as in the present Case). Taking into account the injected units and the Credit Notes received upto March 31, 2014, the total unadjusted units are 46,43,684. (21) If the unavailed units are not adjusted, MSL will be put to great financial burden as it is, on one hand, made to pay Rs.7.01 per unit for units consumed by the Sukeli Plant from MSEDCL and, on other hand, MSEDCL wants to purchase the banked units only at Rs per unit. (22) The MSL Plants being represented by two separate consumer numbers does not affect their captive user status. Since the Vile Bhagad and Sukheli Plants are both owned by MSL, they are one entity and, therefore, enjoy captive status and are entitled to adjustments for the units generated by its captive windmill. (23) An Obligated Entity is liable to procure a certain minimum amount of Renewable Energy (RE) under the Renewable Purchase Obligation (RPO) Regulations. The rationale of MSEDCL denying sourcing power from multiple sources has always been that such sourcing poses operational and billing difficulty. Such difficulty is bearable in the instant case where the matter of RPO is proposed. Such dual treatment, wherein on one hand the sourcing of power from sources that are renewable and conventional, respectively, is prohibited, and the same is allowed in the instance of RPO, is contradictory. The RPO mechanism set up to incentivize and promote as well as sustain RE generation needs to be given precedence over the slight inconvenience MSEDCL may face. Thus, sourcing of power from multiple sources should be allowed in line with the spirit of OA as outlined in EA, (24) Since unadjusted units have already been injected and consumed by MSEDCL, not permitting MSL for their settlement or forcing MSL to make distress sale is against tenets of natural justice. MERC Order in Case No 129 of 2014 Page 5 of 15

6 4. At the hearing held on 30 October, 2014, MSL was asked to make an additional detailed submission considering the averments made by 11 November, MSEDCL was directed to submit its Reply by 18 November, In its Reply dated 18 November, 2014, MSEDCL has submitted that:- a) This is neither a case of non-grant of OA nor a non-grant of banking by MSEDCL. b) MSL has contended in its written submission that the Commission has dealt with the issue relating to banking, and has quoted the ATE decisions in relation to banking. It has quoted the decision of the Commission dated 24 November, 2003 in relation to banking, particularly para The jurisdiction of the Commission to rule on banking of wind energy, its concept, treatment and tariff, is different from calling upon the Commission to exercise its jurisdiction when a consumer is aggrieved by the action of the Distribution Licensee in refusing to adjust banking units of another consumer connection. c) In its Judgment in Official Trustee; W. B. Vs. Sachindra, AIR 1969 SC 823, the Supreme Court ruled that 15. It is not sufficient that it has some jurisdiction in relation to the subject matter of the suit. Its jurisdiction must include the power to hear and decide the questions at issue, the authority to hear and decide the particular controversy that has arisen between the parties. d) The issue raised by MSL falls within the definition of grievance which should be dealt with by the fora under the MERC (Consumer Grievance Redressal Forum (CGRF) and Electricity Ombudsman) Regulations, 2006 ( the CGRF Regulations ). MSL is demanding OA permission for the period when SEM was not installed, while trying to circumvent the relevant Regulations and Orders of the Commission. The Order dated 6 May, 2014 in Case No. 44 of 2014 is binding on MSL, and it cannot contend that the relevant period is prior to the Order. 6. In its Rejoinder of 29 December, 2014 and further submission dated 21 May, 2015, MSL has stated as follows:- (1) The issue before the Commission is that of adjustment of banked units of a captive user being injected from one Plant within the captive arrangement with the bills of the other Plant within the same arrangement. Thus, the subject matter over which the allegation of lack of jurisdiction is made is regarding banking of energy. The Commission, vide Order dated December 3, 2013 in MA No. 9 of 2013 in Case No. 46 of 2013, has held that it has the jurisdiction to decide on the matters of banking facility. Therein too the issue was the banking facility with respect to captive arrangement. MERC Order in Case No 129 of 2014 Page 6 of 15

7 (2) The Order in M.A. No. 9 of 2013 finds that, though there is no express provision for banking, the same has been recognized by MSEDCL in the past and the benefits of banking facility have been extended to captive arrangements. (3) The Commission would be assuming jurisdiction if it entertains issues of banking of energy. The EA, 2003 is a comprehensive code. The powers under the EA, 2003 are wide enough to bring the issues relating to the banking of units within its purview. Thus, the State Commission is vested with vide powers under the EA, 2003 to rule on banking related issues. (4) The objection of MSEDCL to the jurisdiction is based on misplaced application of the authorities in Mohammed Hasnuddin vs. State of Maharashtra (1979 (2) SCC 572) and Hriday Nath vs. Ramchandra (AIR 1921 Cal. 34). The Mohammed Hasnuddin Case deals with an authority of limited jurisdiction under the Act to assume jurisdiction upon consideration of the facts and circumstances. However, MSL has already pointed out that the Commission has requisite jurisdiction, which has been accepted by the Commission itself in its Order in M.A. No. 9 of There is no question of a limited jurisdiction of the Commission or its assumption of jurisdiction herein. (5) The issue of banking and adjustment of units banked are the subject of various issues that are beyond the definition of grievance under the CGRF Regulations. (6) The jurisdiction of the CGRF comes into operation only on the non-performance of a service or obligation by a Distribution Licensee pursuant to any arrangement under a licence or a contract or an agreement. Here the issue pertains to banking of the units and their adjustment, which does not fall under the definition of grievance but is pursuant to a captive arrangement. While the case laws cited by MSEDCL only provide instances of individual complaints stemming from such license, agreement or contract, they shed no light on the aspect of banking which is independent of the same. Thus, the present dispute falls beyond the ambit of the CGRF and squarely within the jurisdiction of the Commission. (7) There is nothing to restrict the jurisdiction of the Commission with regard to any of the activities of a Distribution Licensee. In terms of Section 17 of the EA, 2003, prior approval of the Commission is necessary for the Distribution Licensee to acquire the Utility of any other Licensee or merge his Utility, etc. Accordingly, anything done in relation to the electricity activities ipso facto comes under the jurisdiction of the Appropriate Commission. (8) Banking of electricity is a service rendered by the Distribution Licensee. The banking of electricity has the effect of using the power system in the State to deposit the electricity at a particular point of time with the Distribution Licensees to be taken back at a later point of time. The electricity deposited by a Captive Power Plant (CPP) at a particular point is utilized in maintaining the supply of MERC Order in Case No 129 of 2014 Page 7 of 15

8 electricity by the Distribution Licensee, and at a later time the Distribution Licensee arranges to supply equivalent amount of electricity to the Industrial Plants owning the CPP. (9) This is a swapping or exchange of electricity without there being a sale of electricity or, at the most, supply of electricity by the CPP to the Distribution Licensee and return/re-supply of such electricity by the Distribution Licensee back to the Industrial Plant of the CPP. Now, under the same captive arrangement, if the Distribution Licensee has collected the electricity to be supplied at a Plant and the same Plant is no more the recipient but another Plant in its place of the captive consumer is allowed OA within the arrangement, then there exists no restriction to supplying back the energy for off-setting the same with such other Plant s bills, more so when the Plants seeking adjustment as well the Generating Plant belong to the same owner. (10) The change of drawal point and the denial of continuation of sourcing power from JSW are related issues and the same are facts of the matter. There is no reason for MSL to let go of cheaper power on its own volition. The denial of such sourcing was directed by MSEDCL, which is a matter of record. (11) The change of drawal point initially from Sukeli to Vile Bhagad was requested to adjust the restriction imposed by MSEDCL for sourcing from JSW. Moreover, MSL denies the submission of MSEDCL that MSL had sought the change of drawal point as an afterthought. In fact, MSL had sought such change as early as 24 August, (12) Further, as the change was suggested or rather compelled by MSEDCL and as the Vile Bhagad Plant was new, there was no choice with MSL than to do the calculation of the units that may be consumed. If MSEDCL had not compelled MSL to change the drawal point to Vile Bhagad, MSL would have consumed the windmill s generation as well as power from JSW. In the interest of avoiding any dispute with MSEDCL, MSL availed change of drawal to the Vile Plant and, hence, that cannot be held against MSL. (13) The Order dated 6 May, 2014 in Case No. 44 of 2014 is not retrospective, and hence has no applicability to the present Petition as the issue in dispute arose before that Order. (14) The arrangement in the present Petition is very distinct from the arrangement before the Commission in Case No. 19 of In the present Case, banking involves monthly recording of units generated at the 33 kv Windmill Generating Unit of MSL located at Satara. The recorded reading Credit Notes are generated after deducting relevant wheeling and transmission losses. The result is the adjustment or accounting entry pursuant to which net units are then deducted from the units consumed by the consumer from the monthly bills. MERC Order in Case No 129 of 2014 Page 8 of 15

9 (15) The objection of MSEDCL to multiple sourcing is baseless. For example, had MSL had a fossil fuel based CPP as well as the windmills, then such permission is granted. Also, for the fulfilment of the RPO, the sourcing of RE with a fossil fuel is allowed and the restriction as imposed by MSEDCL does not exist. Since MSL s Plants are captive users of RE, there cannot be restriction on consuming power under OA from any other source. MSL had also raised this point during the hearing on 23 October, 2014, but MSEDCL s Reply is silent on it. (16) Initial change of drawal point was at the insistence of MSEDCL and such direction was unjustified, as explained above. Vide letter dated 24 August, 2013, MSL had once again sought change of drawal point in order to ensure adjustment of wind energy units. However, it is only on account of MSEDCL s denial to allow availing power from JSW as well as the captive windmill that this dispute has arisen. (17) MSL had indeed complied with the directions of MSEDCL and also discontinued JSW power. Despite such discontinuation, MSEDCL seeks to use it as a reason for not allowing the units from Vile Bhagad to be adjusted in favour of the Sukeli Plant. MSEDCL has not adequately explained itself on this issue. With respect to the OA application of MSL, MSEDCL chose to raise the objection of setting up of SEM as late as on 3 November, 2014 which was received by MSL on 14 December, MSEDCL has again imposed such unreasonable condition and, if MSL s OA is withheld, it would amount to gross injustice. (18) As per the EA, 2003, SEMs are necessary where consumer want Intra State or Inter State OA with Availability Based Tariff (ABT). However, MSEDCL is compelling this installation for OA in its area. Besides, it is within the authority of Licensee to install correct metering even though at the cost of consumer. (19) MSEDCL stated that it has relied on the Order dated 6 May, 2014 in Case No. 44 of 2014, to the effect that sourcing power from multiple sources is prohibited. Vide Order dated 22 April, 2015 in Appeal No. 169 of 2014, the ATE has ruled that the Commission has erred in not allowing OA to consumer from more than one source in violation of its Distribution OA Regulations ( DOA Regulations ), 2005 for the period prior to the notification of the new DOA Regulations, There cannot be any restriction on MSL to source power from non-conventional sources, if it has its own RE source to consume as a captive. MSL is seeking OA for self-use of the Wind Power generated from its windmills since (20) MSEDCL granted MSL permission for sourcing power from JSW vide letter dated 2 July, Vide letter dated 27 November, 2012, MSEDCL withheld the OA permission on the ground that sourcing power from multiple sources is not permitted. Vide letter dated 29 December, 2012, MSEDCL called upon MSL to change the drawal point to the Vile Bhagad Plant as sourcing power from two sources is not permissible. MERC Order in Case No 129 of 2014 Page 9 of 15

10 (21) Due to such unjustified and arbitrary acts, MSL changed the drawal point and consequently the energy from the windmill units could not be set off against the consumption of Sukeli Plant. 7. At the hearing held on 6 August, 2015, MSEDCL stated that it has challenged the ATE Judgment dated 22 April, 2015 in Appeal No. 169 of 2014 before the Supreme Court, on which Notice has been issued but no stay granted. MSEDCL also sought an adjournment. 8. At the hearing on 27 August, 2015, MSL reiterated the facts as set out in its Petition. MSEDCL referred to its Reply with regard to the legal issue, and submitted that the energy banked/not used at the Vile Bhagad Plant cannot be adjusted in the energy bills of the Sukeli Plant. MSEDCL also raised the issue of jurisdiction of the Commission. The Supreme Court had held that individual billing issues were the domain of the consumer grievance redressal mechanism. Whereas the grant or otherwise of OA was within the Commission s jurisdiction, downstream billing disputes were within the ambit of the CGRFs. MSL responded that the issue related to banking and adjustment of units between one Plant of MSL and another, which was within the Commission s jurisdiction. The Commission asked MSEDCL to submit its say on the issue of jurisdiction in the light of the ATE Judgment dated 28 July, 2011 in Appeal No. 36 of In its further submission dated 19 September, 2015, MSEDCL has stated as follows: (1) The issue of self-use of energy produced by a captive wind Generator was neither the subject matter of adjudication before the ATE nor was it argued by any of the parties. In view of the findings of the ATE that the CGRF has jurisdiction only after the OA is granted, in the present case the Generator becomes a consumer. (2) MSL has set up captive windmills for self-use, meaning thereby that the whole purpose of generation of energy is not for third party sale but for selfconsumption. The use of the work Express Feeder appearing in the Petition of MSL clearly establishes the fact that the sale, production and end use of energy is for self-consumption. Express Feeder is a term associated with a consumer and not a Generating Station. The definition of Consumer as per section 2 (15) of EA, 2003 and Captive Consumption as per the Law Lexicon has been referred to. The expression Captive Consumption would mean the generation of electricity for the use of the holder of the plant may be one single person or a joint venture collectively by many as one unit. (3) The above definition has to be construed not as per Rule 3 of the Electricity Rules, 2005 as MSL is not a CPP. However, the definition has to be seen from the ambit of the words for the use of the holder, which clearly establish that, once MSL admits that the captive windmills were built for self-use, then there can be no restriction in holding MSL to be a consumer. MERC Order in Case No 129 of 2014 Page 10 of 15

11 (4) Attention is also drawn to the definitions of captive generating plant, "generating company", premises, "supply", as per Sections 2(8), 2(28), 2(51), and Section 2(70) of EA, (5) A harmonious interpretation of these definitions would reveal that the whole cause of action in the present Case rest on the following: 1) Event of receipt for use at Vile Bhagad Plant. 2) After receipt in course of use at Vile Bhagad Plant, it was noticed that the electricity is not fully used/consumed. 3) Adjustment sought in receipt of use at Vile Bhagad Plant in the energy bills of Sukeli Plant. (6) The whole cause of action has arisen in the present matter on account of self-use, accounting and adjustment in bills pursuant to less use at one Plant for which OA was granted. This accounting/settlement/adjustment issue is purely in the nature of a billing dispute of which the sole jurisdiction lies with the CGRF. This issue of disputes arising after the grant of OA has also been discussed by the ATE.The intention of filing the Petition is nothing but adjustment of alleged non-adjustment of units, which is completely covered under the ambit of billing dispute. There is no prayer which makes the present dispute fall under the realm and jurisdiction of this Commission. (7) The important line to be drawn between the present Case and the Appeal before the ATE is that the sole grievance before the ATE was that of allowance/disallowance of OA permission to M/s. Indo Rama, which is not relevant in the present Case. MSL is merely seeking adjustment of units for one Plant for which OA was granted against another Plant, which is the aftermath of the OA permission; hence the Internal Grievance Redressal Cell (IGRC) and CGRF are the competent authorities to adjudicate the present dispute as it involves merely the adjustment of units which is clearly a billing/commercial dispute. Under Regulation 6.8 of the CGRF Regulations, 2006, a list of disputes which are excluded from the jurisdiction of CGRF is provided. That list does not exclude the matters relating to OA from the CGRF jurisdiction. Therefore, the present matter relating to dispute between a consumer and a Distribution Licensee lies squarely within the jurisdiction of the concerned CGRF. (8) In the ATE Judgment in Appeal No. 36 of 2011, at paras. 18 and 27, it has been held that, once the permission for OA is granted to a consumer, then the CGRF has the jurisdiction to entertain the disputes arising thereafter. The ATE has settled the position that the issue of jurisdiction of the CGRF only arises after OA permission is granted. However, the ATE has also held that the downstream issues arising after availing OA by a generator or licensee would have to be adjudicated by the State Commission as provided under Regulation 18(2). MERC Order in Case No 129 of 2014 Page 11 of 15

12 (9) The ATE in its Judgment has stated that the Appeal arose out of an Order of this Commission on the issue of grant of permission for OA to M/s. Indo Rama for sourcing energy from the Indian Energy Exchange. However, such is not the case in the present Petition. MSL has been duly granted OA permission. It is only after the OA permission that MSL has come before this Commission with a prayer for adjustments of unadjusted units, which is purely a commercial/billing dispute covered squarely under the jurisdiction of the CGRF. (10) Therefore, the Petition may be dismissed for want of jurisdiction and the matter remanded to the IGRC/CGRF keeping all the contentions of the parties open. 10. In its response dated 5 October, 2015, MSL has submitted inter alia that:- a) The definition of the term jurisdiction is well established. That definition in no way disputes the claim of MSL that the Commission has the requisite jurisdiction in this matter. There are precedents wherein the Commission has dealt with the matter of banking for a CPP. b) The issue before the Commission is that of adjustment of banked units of a captive user being injected from one Plant within the captive arrangement with the bills of the other Plant within the same arrangement. Thus, the subject matter over which the allegation of lack of jurisdiction is being raised is regarding banking of energy. c) Vide Order dated 28 July, 2011 in Appeal No. 36 of 2011, the ATE has held that the State Commission alone will have the jurisdiction on disputes regarding OA. Hence the Commission has the jurisdiction to entertain the present matter on the issues of banking and adjustment of injected units. 11. At the hearing on 3 December, 2015, the Commission informed the parties that the hearing had been scheduled since the Chairperson had demitted office on 9 November, 2015 before the final Order could be passed. The parties consented to all earlier submissions being taken on record, and to the hearing being in continuance of the earlier proceedings. Both parties also stated that they had nothing to add. However, MSEDCL informed the Commission that the Bombay High Court had dismissed the challenge to the DOA Regulations, 2014, but the Judgment was awaited. Commission s Analysis and Ruling 12. MSL has two industrial Plants which get supply from MSEDCL: a) At Sukeli, Taluka Roha, District Raigad - Consumer No , having Contract Demand of KVA. MERC Order in Case No 129 of 2014 Page 12 of 15

13 b) At Plot no. D114, MIDC Vile Bhagad, Taluka Pen, District Raigad - Consumer No , having Contract Demand of 8000 KVA. 13. In 2001, MSL set up a 7 MW (20 x 0.35 MW) Wind Energy CPP in Satara District which was supplying power through OA for self-use by its Sukeli Plant till part of FY During the course of FY , MSL was granted OA for sourcing power for its Sukeli Plant from JSW also, a third-party conventional Generator, and installed a SEM at the consumption end. Subsequently, MSEDCL objected to the OA on the ground that the Sukeli Plant was already obtaining power from the CPP and sourcing from multiple Generators was not permissible (and hence CPP energy units could not be set off against that Plant). By that time, MSL had established its Vile Bhagad Plant, and OA permission and the drawal point for its CPP power was eventually revised to that Plant instead from September, 2012 till the end of FY In April, 2013, MSEDCL initially gave OA permission for the entire period of FY (a) to the Vile Bhagad Plant for sourcing power from the CPP for self-use, and (b) to the Sukeli Plant to source power from JSW. However, the Vile Bhagad Plant was unable to absorb the entire CPP power, eventually leading to accumulation of around 50 lakh surplus unadjusted energy units. Hence, on 24 August, 2013, MSL sought a change in the CPP drawal point back to the Sukeli Plant, to which MSEDCL does not seem to have responded(though it had raised the issue of multiple Generators earlier in FY ). Eventually, MSL discontinued its PPA with JSW and sought a change in the drawal point of its CPP power back to the Sukeli Plant in order to enable adjustment of the accumulated units. MSEDCL gave OA from 15 February, 2014 till the end of the FY from the CPP to the Sukeli Plant instead of Vile Bhagad. Thereafter, through several letters, MSL sought the setting-off of the unadjusted wind energy units of its Vile Bhagad Plant for FY against the energy bills of its Sukeli Plant. However, this was rejected by MSEDCL vide letter dated 7 June, The Commission notes that surplus unadjusted CPP wind energy units of the Vile Bhagad Plant might not have accumulated had MSL been allowed OA to supply CPP power to its Sukeli Plant in addition to power from JSW. This was denied on the ground that sourcing from multiple Generators was not permissible. In its Judgment dated 22 April, 2015 in Appeal No. 169 of 2014 (against the Commission s Order dated 6 May, 2014 in Case No. 44 of 2014), the ATE has held that OA under the DOA Regulations, 2005 cannot be denied on the ground that power is sought to be sourced from multiple Generators. However, MSL did not raise any dispute on this issue in the appropriate forum at that time, and accordingly supplied the CPP power through OA to its Vile Bhagad Plant instead. 17. In these circumstances, the definitions in Section 2 of the EA, 2003 of the following terms are relevant to the present Case: (8) Captive generating plant means a power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by MERC Order in Case No 129 of 2014 Page 13 of 15

14 any co-operative society or association of persons for generating electricity primarily for use of members of such cooperative society or association; (15) "consumer" means any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be; (47) open access means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission; (49) person shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person; (51) premises includes any land, building or structure; (70) Supply, in relation to electricity, means the sale of electricity to a licensee or consumer; The Commission s Supply Code Regulations, 2005 define Contract Demand as follows: (f) Contract Demand means demand in kilowatt (kw) / kilovolt ampere (kva), mutually agreed between Distribution Licensee and the consumer as entered into in the agreement or agreed through other written communication; 18. A conjoint reading of these definitions shows that there is a one-to-one relation between a Distribution Licensee and the premises of a consumer, i.e. every consumer premises is an independent entity for the supply of electricity and other supply-related matters. In this background, the Commission notes that the EA, 2003 distinguishes, in the usage of these terms, between a person on the one hand, and a consumer and premises on the other. Thus, while MSL is a person owning the two Industrial Plants as well as the CPP, the two Plants are otherwise distinct and separate consumers and premises, the one at Sukeli bearing Consumer No and the other at Vile Bhagad being Consumer No These two separate consumer connections for two different premises have their own independent technical parameters for MSEDCL. Moreover, the OA permissions are also distinct and separate permissions for supply from a particular generation point to a particular consumer and premises. Hence, the Commission does not find any merit in MSL s claim for adjustment of unabsorbed consumption of its Vile Bhagad Plant against that of the Sukeli Plant, notwithstanding the common ownership of these Plants as well as the CPP by the same person. The Commission also finds no merit in MSEDCL s claim that it has no jurisdiction to entertain this matter: in the Commission s view, the banking adjustment issue as between its two Industrial Plants raised by MSL is not a merely a billing dispute qua MSL as a consumer of MSEDCL, and is not covered by the term MERC Order in Case No 129 of 2014 Page 14 of 15

15 grievance under the Commission s CGRF and Electricity Ombudsman Regulations, The other claim of MSL is for the grant of OA for sourcing of CPP power by its Sukeli Plant and issue of Credit Notes for FY from 1 April, 2014, instead of from 13 June, MSL applied for OA permission for FY for this purpose on 10 March, On April 16, 2014, MSEDCL informed it that OA would be granted only upon installation of SEMs. This had not been done so far at the CPP generation end, though the issue was not raised in FY presumably because of the sequence of ongoing OA permissions. MSL installed the SEM at the CPP end on 13 June, 2014, and MSEDCL accordingly gave OA permission for FY from that date. In this context, Regulation 7.1 of the DOA Regulations, 2005 requires that : Every Connector shall install or have installed a correct meter in accordance with the Regulations made in this behalf by the Authority under Section 55 of the Act: Provided that every Connector who is either: (i) (ii) (iii) a consumer under Regulation 4.2 with a contract demand in excess of 1 MVA; or a person under Regulation 4.3 with a contract demand in excess of 1 MVA; or a Supplier directly connected to the distribution system of the Distribution Licensee under Regulation 4.4, shall install or have installed a Special Energy Meter. In its Order dated 3 January, 2013 in Case Nos. 8, 18, 20 and 33 of 2012 also, the Commission had noted that installation of SEMs is mandatory under the DOA Regulations, 2005, and directed as follows: all third party sale and self-use transactions under open access shall have to install SEMs at generation as well at consumption end. Further, the Commission directs the WTG and all Open Access Consumers to install SEMs both at wind generation and consumption end within a time period of six (6) months from the date of issuance of this Order and also directs MSEDCL to submit the compliance report thereafter within one (1) month of completion of installation by all the open access consumers and wind generators. Hence, MSL s claim for grant of OA permission and issue of Credit Notes with effect from 1 April, 2014, prior to the installation of SEM at the generation end, has no merit. The Petition of M/s Maharashtra Seamless Ltd. in Case No 129 of 2014 stands disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member MERC Order in Case No 129 of 2014 Page 15 of 15