MERC Rejects MSEDCL’s Proposal to Revise Time-of-Day Tariff Structure
01.04.2025
The Maharashtra Electricity Regulatory Commission (“MERC“) by its order dated 28.03.2025 has dismissed Maharashtra State Electricity Distribution Limited’s (“MSEDCL“) proposal to revise the Time-of-Day (“ToD“) tariff structure, which sought to reduce the number of off-peak hours and reclassify night hours as peak hours in its Aggregate Revenue Requirement (“ARR“) petition.
Background
MSEDCL had filed Case No. 217 of 2024, a Multi-Year Tariff Petition, for final truing-up of ARR for FY 2022-23 and FY 2023-24, provisional truing-up of ARR for FY 2024-25, and approval of ARR and tariff for the 5th Control Period from FY 2025-26 to FY 2029-30.
As part of this petition, MSEDCL proposed a revised ToD tariff structure, limiting off-peak hours exclusively to solar hours (9:00 AM – 5:00 PM) and categorizing night hours (10:00 PM – 6:00 AM) as peak hours. This proposal, if implemented, would have significantly increased energy charges for consumers and restricted the utilization of banked energy, adversely affecting renewable energy generators and consumers.
Stakeholder Opposition
Tata Power Renewable Energy Limited (“TPREL“), a captive generator in Maharashtra, along with various Commercial and Industrial (“C&I“) consumers, strongly opposed MSEDCL’s proposal.
The proposed ToD structure was inconsistent with MERC’s Multi-Year Tariff Regulations and MoP’s Rights of Consumer Rules and would lead to an unjustified increase in peak hours and costs for industrial consumers. In fact, the proposed ToD tariff structure would have effectively resulted in withdrawal of banking for solar projects in the State of Maharashtra, causing installed capacity to be rendered redundant.
MERC’s Ruling
After reviewing submissions, MERC rejected MSEDCL’s proposal, emphasizing that eliminating the night off-peak rebate could lead to a shift in consumption to daytime off-peak hours where MSEDCL had proposed rebates, disrupting load balancing and grid stability. Solar generation variability due to factors like cloud cover and seasonal changes requires careful grid management.
Accordingly, MERC defined solar hours as 9:00 AM – 5:00 PM (8 hours) and peak hours as 5:00 PM – 12:00 AM (7 hours), with the remaining time slots categorized as off-peak hours. This classification aligns with the Rights of Consumer Rules, 2023, ensuring a balanced approach to load management and tariff structuring.
Click here to read the MERC’s Order
TPREL was represented before MERC by Mr. Shri Venkatesh (Founding Partner), Ms. Priya Dhankhar (Senior Associate), and Mr. Vedant Choudhary (Associate) of SKV Law Offices.