Maharashtra Commission Orders DISCOM to Pay Wind Power Generator Contributions

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The Maharashtra Electricity Regulatory Commission (MERC) has ordered the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to pay premiums for a wind power generator until December 2020 by December 2021.

He also ordered DISCOM, the Electricity Distribution Company (DISCOM) to specify the date on which the unpaid contributions from Zaveri and Company (Gujarat) would be paid.

If DISCOM does not pay the royalty to the wind power producer on time, it will have to pay interest of 1.25% per month. MERC also requested DISCOM to create a transparent mechanism for reconciling and paying dues and uploading it to its website.

Background

The generator owns a 7.5 MW wind power plant in Nashik district, Maharashtra. It entered into a 13-year Power Purchase Agreement (EPA) with DISCOM in June 2009.

The producer claimed that he complied with all the requirements specified in the agreement. But DISCOM had not paid the dues, citing the COVID-19 pandemic and resulting lockdowns as the reason for the delay.

Developer conflicts

The producer claimed that despite the increase in monthly electricity bills, DISCOM did not make the payments on time. It was also alleged that DISCOM forced the producer to undertake not to claim late payment surcharge or late payment charges.

DISCOM had asked the producer to accept a 100% waiver of interest on contributions. The contributions would be paid within two months from the date of signature of the commitment, had assured the DISCOM.

The promoter asked the Commission to order DISCOM to settle the principal outstanding of 62.83 million yen (~ $ 0.85 million) and to delay the payment fee by 6.15 million yen ( approximately $ 83,298).

DISCOM submissions

DISCOM, in its response, said it had already paid the principal amount claimed by the producer in the invoices for April, October and December 2019, and from April 2020 to June 2020.

He was in the process of making other payments of invoices raised by the developer from July 2020 to April 2021 under the terms of the payment plan already submitted to the Commission. DISCOM claimed that the producer voluntarily agreed to waive late payment fees until June 2020.

Commission decision

The Commission ordered DISCOM to settle a wind power producer ‘s contributions until December 2020 by December 2021 and to specify the date on which the payments would be made.

The Commission said DISCOM needs to design a time-limited mechanism to reconcile payments due to all producers.

The regulator, however, did not allow interest on deferred payments claimed by the producer and said that interest was not part of the agreement signed between the parties. He noted that it is only if DISCOM does not respect the extended deadlines stipulated in the particular ordinance for the payment of unpaid contributions that such a request for interest could be authorized. For any future late payment, DISCOM has been ordered to pay interest at the rate of 1.25% per month on the unpaid amount.

The Commission noted that DISCOMs only released partial amounts when producers repeatedly approached the Commission, which was not a desirable situation.

In a similar order recently passed, MERC ordered DISCOM to settle payments to various wind power producers within one month.

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