Order 160 of 2017-15062018

Order in Case No 160 of 2017 Page 1
Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400005
Tel. 022 22163964/65/69 Fax 22163976
Email: mercindia@merc.gov.in
Website: www.mercindia.org.in / www. merc.gov.in
Case No. 160 of 2017
In the matter of
Petition of Bharat Electronics Limited under MERC (Net Metering for Roof-top Solar
Photo Voltaic Systems) Regulations, 2015 for the implementation of 3 MW of Grid
Connected solar power project at Ordinance Ammunition Factory, Khadki (AFK),
Pune with the facility of Net Metering.
Coram
Shri. Anand B. Kulkarni, Chairperson
Shri Mukesh Khullar, Member
Bharat Electronics Ltd (BEL) .......... Petitioner
V/s
Maharashtra State Electricity Distribution Company Limited (MSEDCL).… Respondents
Appearance
For the Petitioner : Shri. Hem Raj Satija (Rep.)
For MSEDCL : Shri. Ashish Singh (Adv.)
ORDER
Date: 15 June, 2018
1. Bharat Electronics Limited (BEL), (A Govt. of India Enterprise, Ministry of
Defence), Jalahalli Post, Banglaore - 560 013, has filed a Petition on 10 November,
2017 under Section 86(1)(e) of the EA, 2003 for seeking clearance under Clause
13'Power to Relax', for the implementation of 3 MW of Grid Connected solar power
project at Ordinance Ammunition Factory, Khadki (AFK), Pune with the facility of
Net Metering under MERC (Net Metering for Roof-top Solar Photo Voltaic Systems)
Regulations, 2015 (Net Metering Regulations, 2015).

2. BEL’s prayers are as follows:
“
a) The electricity supply connection of the Ammunition Factory Khadki (AFK),
Pune, is from dedicated transmission system from 220/ 22kV/ 11 kV Substation, which
is within its premises, and the installation of net metered bi-directional metered solar
systems on consumer premises will utilize the same service line and installation which
is currently being used by the consumer for drawal of power from utility network, for
injection of excess power into the Grid. The average consumption of the AFK is much
higher than 3 MW. Hence MSEDCL, Pune is not likely to face technical and
operational difficulties in the implementation of this project.
b) Ministry of Defence is committed to the cause of Jawahar Lal Nehru National
Solar Mission, JLNSM and has offered to develop 300 MW of Solar Power Plants on
its land in Ordnance Factories and other places.
c) For economic viability of captive solar power plants, where generation during
peak hours is miniscule, the preferred mode of grid connectivity and commercial
arrangement with DISCOM is by way of Net-metering as explained in para 14 above
please. The imposition of CSS, Additional Surcharge, Wheeling Charges, Banking
charges and limit on the banked energy in case of Solar Power Captive Power Plants
and other misc fees and charges, is discouraging the endeavor of the Ministry of
Defence units for the development of Solar Power Plants.”
3. BEL in its Petition has stated as follows:
1) Ministry of New & Renewable Energy (MNRE) for achieving the targets
stated in the Jawaharlal Nehru National Solar Mission, issued a notification vide
Office Memorandum No.30/69/2013-14/NSM (Pt), Dated 07 January, 2015 for
implementation of Defense scheme for setting up of over 300 MW of Grid connected
& Off-grid Solar PV Power projects from 2014 to 2019, with Viability Gap Funding
(VGF) under Phase II/III of NSM, by the Defence Establishments under the aegis of
Ministry of Defence (MoD/ GoI).
2) For the time bound implementation of the aforesaid Defense scheme, MoD
approved the proposal vide letter dated 7 March, 2016 for setting up 150 MW grid
connected Solar Power Plants on the lands provided by Ordnance Factories (under
Ordnance Factory Board (OFB)/ GoI), through BEL, a Defense PSU under MoD,
Govt of India, on nomination basis.
3) BEL is a multi-products, multi-technology, multi-Unit conglomerate with over
350 products in the areas of Military Communication, Radars, Naval Systems, C4I
Systems, Weapon Systems, Homeland Security, telecom & Broadcast Systems,
Electronic Warfare, Tank Electronics, Electro Optics, Professional Electronic
Components and Solar Photovoltaic Systems. BEL foresaw the potential and

importance of Renewable Energy in India and forayed into the business of Solar
Photovoltaic during the years 1995-96. BEL has state of the art 10 MW Mono-
crystalline Solar Cells and Modules manufacturing facility at Bangalore.
4) The Ammunition Factory Khadki, Pune, Maharashtra (AFK), one of the 41
Ordnance Factories across the country, has been identified under the Defense scheme,
for setting up of grid interactive 3 MW PV Solar Power Plant.
5) The Ordnance Factory Board (OFB) having full control of the management of
Ordnance Factories, has authorized BEL for the development of the Solar Power Plant
in the premises of AFK, Pune vide its letter dated 7 March, 2017. AFK, Pune, has also
authorized BEL Bangalore to setup Solar Power Plant on the allocated land within its
premise, vide letter No. 2702/ Solar Power Plant 3 MW/ EO (P&M) dated 19
September, 2017.
Facts of the Case:
6) AFK, Pune is HT Connection Consumer (SC. No. 170019000055) of MSEDCL
and the proposed 3 MW Solar Power Plant is planned to be installed in an allocated
area of 14.4 Acres of land within the premises of the AFK. The power generated from
the solar power plant shall cater to the captive energy needs of AFK.
7) The sanctioned contract demand of AFK, Pune is 5 MVA and getting supply
from MSEDCL through two dedicated express feeders of 11 KV each from the 220
kV /22KV/11 kV, MSTCL Substation (Named as MSEB-512), which is within the
premises of AFK. The annual average consumption of electricity in AFK, Pune is
14.8 MUs against estimated annual generation of 4.8 MUs from proposed 3 MW
Solar Power Plant.
8) Though the average and maximum load of AFK, Pune is much higher than the
generation from the captive Solar Power Plant, but during off-days, but for some
sporadic instances the load may go below 3 MW of generation and it is only in this
condition, the excess generation from Solar Plant shall be fed to the grid. It is
estimated that about 16% of total energy generated over the year may flow to grid (i.e.
about 0.8 MUs out of total estimated annual generation of 4.8 MUs
9) In order to facilitate grid interactive Solar Power Plant, the Commission as per
the powers of the Commission enshrined under clause 86 (1) (e) of the Electricity
Act, 2003 and for the financial viability of the grid connected Solar Power Plant, has
made following regulatory provisions:-
a) Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top
Solar Photo Voltaic Systems) Regulations, 2015.
b) Maharashtra Electricity Regulatory Commission (Distribution Open Access)
Regulations, 2016.

c) Maharashtra Electricity Regulatory Commission (Transmission Open Access)
Regulations, 2016.
10) Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top
Solar Photo Voltaic Systems) Regulations, 2015’, caters only up-to the capacity of 1
MW. For the present 3 MW Captive Solar Power Plant, the only choice left for grid
connectivity of more than 1 MW Solar captive power plant, is by way of applying for
open access under the provisions of the Maharashtra Electricity Regulatory
Commission (Distribution Open Access) Regulations, 2016 and avail banking facility
for Solar Power generation. However, while drawing power under Open Access /
Banking facility, the consumer is required to pay additional charges and other
financial implications, having negative impact on the generation tariff and viability of
the project, which are indicated as under:-
a) On withdrawal of banked energy, the consumer is required to pay following
charges:-
Wheeling Charges;
Cross-Subsidy Surcharge;
Additional Surcharge on the charges for wheeling;
MSLDC fees and charges.
b) Withdrawal of banked Solar power is permissible only during off-peak hours.
Credit for banked energy is not permitted during the months of April, May, October
and November, and the credit for energy banked in other months shall be as per the
energy injected in the respective Time of Day (‘TOD’) slots.
c) The unutilized banked energy at the end of the financial year is limited only to
10% of the actual total generation by such Renewable Energy generator in such
financial year,
d) Banking Charges is 2% of the energy.
e) Processing fee by MSEDCL i.e. Rs. 1 lakh whereas connectivity is within the
sanctioned load as per the existing design of the grid infrastructure.
f) Registration Fee with MEDA Rs. 1.50 Lakh (Rs. 50,000 per MW)
11) Thus, for the viability of the project, a Petition is filed to seek relaxation for
executing the aforesaid 3 MW Solar Power Project under the provisions of
Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top Solar
Photo Voltaic Systems) Regulations, 2015.
Ground in support of the case:
12) The aforesaid Scheme of MNRE/ GoI mandates Bharat Electronics Limited
(BEL), Bangalore, for complying with the Domestic Content Requirement (DCR)

while deploying both domestic cells and PV Modules for the Solar Power Projects
being executed by BEL.
13) The Ordnance Factories including AFK, Pune works under the control of
Ordnance Factory Board under the aegis of Ministry of Defence (MoD) and the power
produced from the proposed Solar power plant is for Captive consumption of the
Ordnance Factory only.
14) BEL as developer and operator of the plant shall supply generated power from
the Solar plant to the AFK at a fixed tariff of Rs. 4.50 per unit for 25 years from the
date of commissioning of the plant. Due to off-work days of factory in a year, it is
estimated that about 16% of the energy generated over the year i.e. about 0.8 MUs of
the generated 4.8 MUs shall be required to be banked. While drawing back the
Banked Energy and due to the impact of the aforesaid financial implications, the tariff
for the supply of power reduces from Rs. 4.50 per unit to Rs. 3.83 per unit. If out of
the total banked energy of 16%, the permissible limit of 10% is surrendered and
considered sale to the DISCOM at APPC (Rs. 3.50 per unit) as per the regulatory
provisions and balance 6% is drawn from the banked energy, the tariff for the overall
supply of 4.8 MUs over the year is reduced to Rs. 4.15 per unit.
15) Solar Energy being Natural and Clean Renewable energy resource, it is need
of the hour to utilize it upto its full potential. MoD is fully committed to the cause of
Jawaharlal Nehru National Solar Mission (JNNSM) as per the guidelines of MNRE/
Govt. of India.
16) The Ordnance factories possess vast pockets of vacant land and also consume
large amount of power for their operations. Hence, there exists considerable potential
for installing solar power systems which can be harnessed to meet local in-house
demand. This doorstep injection of local generation would further help in reducing
line losses of the distribution licensee. Further the injection into grid of surplus power
shall reduce the overall Pooled Cost of Power Purchase for that year including new
projects of energy.
Other References:
17) Odisha Electricity Regulatory Commission vide order No. OERC-Engg.
02/2010/ (Vol-IV)/1131 dated 19 August, 2016, under para 1.(vi.), in order to
facilitate captive power plants on RE, and to encourage consumer participation towards
renewable energy, has passed the order that
“There is no cap on the capacity of solar installation at a particular consumer level
as long as it is within the limit of the connected load / 75% of transformer capacity.
The earlier restriction of 1 MW solar capacity at a single location is removed”.
18) Also Uttar Pradesh Electricity Regulatory Commission, after considering the
petitions filed by the Petitioner/ Ordnance Factories for the Solar Projects under the
Scheme, has given approval for 5 MW at Kanpur (Ref. UPERC Order in Petition No.

1202 of 2017dated 16 August, 2017) and 2 MW at Muradnagar (Ref. UPERC Order
in Petition No. 1202 of 2017dated 16.08.2017) for net-metering provisions.
19) In the larger interest of the state and the environment, the Commission is
requested to kindly give its clearance under the Clause 13 “Power to Relax” of the
regulations, for the implementation of the instant 3 MW of Grid Connected solar
power project in the premises of the AFK, Pune under the developer mode along with
the facility of Net Metering please.
4. MSEDCL in its submission dated 28 December, 2017 has stated that;
1) AFK, Pune is an existing consumer of MSEDCL. BEL has been selected as
Project Developer/ Holder for installation of 3 MW Solar power project in the
premises of AFK under the JNNSM Phase-II VGF scheme for setting up of 300 MW
Grid-connected and Off-Grid Solar Power projects by Defence Establishments.
The solar power generated by 3 MW Solar project of BEL will be supplied to AFK at
Rs.4.50 p.u. for 25 years. After the consumption by AFK, the remaining energy will
be supplied to Grid.
Eligibility under Net Metering Regulations:
2) The Commission has specified the definition of eligible consumer under
Regulation 2.1(g) as below:
2.1(g) “Eligible Consumer” means a consumer of electricity in the area of supply of
the Distribution Licensee who uses or intends to use a Solar Photo Voltaic (‘PV’)
generating System having a capacity less than 1 MW, installed on a roof-top or any
other mounting structure in his premises, to meet all or part of his own electricity
requirement, and includes a Consumer catering to a common load such as a Housing
Society:
Provided that such generating System may be owned and/or operated by such
Consumer, or by a third party leasing such System to the Consumer.
3) MERC (Net Metering for Roof-Top Solar Photo Voltaic Systems)
Regulations, 2015 makes it applicable to a consumer of Distribution licensee who
intends to use a Rooftop Solar Photovoltaic generating system having a capacity less
than 1 MW.
4) Thus, BEL is not entitled for net metering as per the existing legal provisions
but be treated as IPP/RE generator.
5) Moreover, BEL which is a third party entity installing and owning the Solar
plant and selling power to AFK through a supply agreement at rate 4.50/- p.u for 25

years which is clear third party sale. The supply/wheeling of power generated through
the said Solar power plant established by BEL to AFK will be under the purview of
Open Access Regulations only. Hence will attract CSS and other applicable Open
Access charges and losses as per provisions in the Electricity Act 2003 & present
MERC (Distribution Open Access) Regulations, 2016.
Grid Connectivity:
6) The generating stations can apply for the Grid connectivity to Distribution
System as per the Regulation 5 of MERC (Distribution Open Access) Regulations,
2016. Similarly, Imbalance charge, Reactive energy charge, banking to Renewable
Energy & commercial matters in relation to open access are governed by MERC
(Distribution Open Access) Regulations, 2016. Wheeling of Solar energy from the 3
MW Solar power Project of BEL up-to the destination of use will squarely fall under
the purview of MERC (Distribution Open Access) Regulations, 2016. The generator
shall be connected to MSEDCL’s grid and not to internal bus of consumer.
7) Therefore, BEL can apply for and avail of various regulatory provisions of
Distribution Open Access so as to serve its purpose. Hence, the demand seeking
amendment in Net Metering Regulations, for which BEL is not at all eligible, is
without any locus and justification.
8) As per the present Regulatory framework, the proposal of BEL is not a fit case
due to the eligibility criteria below 1 MW specified in the Net Metering Regulations,
2015. However, relaxing the condition for any consumer per se, would lead to making
“Exception to Rule of Law” and this would create undue precedence as well as unjust
enrichment, whereby various other potential consumers would approach MSEDCL
seeking this benefit, which may not be a healthy situation. Further, such situation will
have commercial implications on MSEDCL. In view of the above, the demands of
BEL are not tenable and the petition is liable to be dismissed.
5. BEL in its submission dated 5 January, 2018(filed on 8 January, 2018) has stated that;
1) The present 3 MW Solar Power Plant in the premises of Ordnance
Ammunition Factory Khadki (AFK), Pune is being executed by the Ministry of
Defence (GoI) through the Defence Company, BEL, Bangalore. Both these
organizations i.e. Ordnance Ammunition Factory Khadki (AFK), Pune and BEL,
Bangalore are working under the Department of Defence Production (DDP), MoD,
New Delhi.
2) The project has been taken up as per the MNRE ‘Defence Scheme’ for
development of total of 300 MW Grid Connected Solar Power plants by the Ministry
of Defence on vast pockets of Land available and also keeping in view the total
targets of 100 GW (100,000 MW) to be developed under National Solar Mission of
Govt. of India.

3) The project is being executed exclusively for the Captive use of the Ordnance
Factory through funds of the Ministry of Defence and is fully compliant to the
conditions of Section 9- Captive generation of the EA, 2003. There is no sale of
power to third party.
4) The Net Metering facility has been sought for in this project of 3 MW on
merits of the case as under:-
i. The Project of 3 MW is within the premises of the Ordnance Factory,
where the sanctioned load is 5 MVA (5MW).
ii. The Load of 5 MVA is being fed through two 11 KV Express Feeders
emanating from the 220 kV/22 kV/11 kV Substation (named as MSEB-512,
within the premises of the consumer) and terminating in the factory premises
of the consumer at 11 kV Bus.
iii. In the present case, Open Access grid connectivity is not called for by
incurring unnecessarily expenditure on grid connectivity through open access
and increasing line losses. In the Grid Connectivity feasibility report,
MSEDCL has conveyed that a new substation of 22 kV/11 kV shall have to be
constructed. The cost of construction of New Substation on the Land to be
provided by the Consumer would be about Rs. 10 Crore on the estimated cost
of the project of Rs. 15 Crore.
iv. In the Forum of Regulators Working Group Report on ‘Evolving Net-
metering Model Regulation for rooftop based solar PV projects’, the following
excerpts may kindly be re-visited
a) In a net-metering arrangement, the focus is primarily on self-
consumption of electricity generation by the consumer. The excess/surplus
is either sold to or banked with the local utility. Net metering
arrangements, thus, combine elements of captive consumption and
exchange of power with the utility.
b) In respect of Energy Accounting, Commercial and Technical
Arrangements, the capacity of an individual rooftop PV systems under net
metering concept is subject to various parameters such as available
capacity of the service line connection of the consumer, the connected load
of the consumer and the cost implications of utility system augmentation
(if required).
c) The installation of net metered rooftop solar systems on consumer
premises will utilize the same service line for excess power injection into
the grid, which is currently being used by consumer for drawl of power
from utility network. Thus, the capacity limits for installation of net-
metering based rooftop solar systems has to address the following two
requirements: a) the individual capacity limit for system that can be
installed on a particular consumer premises b) the maximum (higher limit)
capacity allowed to be installed under a net-metering arrangement.
d) In addition, the issue concerning the implication of cost for
infrastructure up-gradation at distribution level, if required on account of
installation of higher capacity system than that permitted by the existing
service line needs to be addressed.

e) International case studies on the capacity limits prescribed by the
utilities shows a wide variation depending on technology, the customer
type and application. In the United States, the net-metering concept in a
number of provinces like California, Colorado, Florida, New Jersey etc
includes other technologies (solar thermal electric, wind, biomass,
hydroelectric, geothermal electric) apart from rooftop solar PV. Hence
some of these provinces have higher limits allowed for net-metering going
upto 10 MW. The capacity limits also depend internationally on the type
of customer. For example,
v. To encourage consumer participation towards RE the Uttar Pradesh
Electricity Regulatory Commission(UPERC) has given relaxation upto 5 MW
for Net-metering facility to rooftop Solar Power Plants and in this direction,
the Orissa Regulatory Commission has removed the Gap in the capacity of
Solar installation at consumer level. As long as it is within the limit connected
load / 75% of transformer capacity and has removed the earlier restriction of 1
MW Solar Capacity at a single location.
vi. In the present scenario when there is scarcity of Land and limited
rooftop available, it is submitted for the consideration of the Commission to
encourage the installation in the premises of the consumer through Net-
metering facility and to avoid pay for the transmission loss, wheeling charges,
banking charges and other miscellaneous fees and charges which are
discouraging the endeavor of the consumers for installation for Solar Power
Plants in their premises.
vii. The objections raised by MSEDCL does not seem to be rational as it
has not clearly laid down the negative impact of relaxation in the capacity
limit to this project of 3 MW on the merits of the case as explained above
please.
5) It is therefore, prayed in the larger interest of the State and the environment
that the Commission to kindly give its clearance under clause 13 power to relax the
Net Metering Regulations, 2015, for implementation of the instant 3 MW of Grid
Connected Solar power Project in the premises of the Ammunition Factory, Khadki
(AFK), Pune with the facility of Net Metering on merits of the case.
6. The proceedings of the hearing held on 8 January, 2018 are summarized as follows:
1) The Representative of Bharat Electronics Ltd (BEL) stated that:
a) BEL has been selected as Project Developer/ Holder for installation of 3 MW
Solar power project in the premises of Ammunition Factory Khadki (AFK), Pune
identified under the Defense Scheme.
b) AFK Pune is consumer of MSEDCL and the sanctioned contract demand is 5
MVA. The proposed 3 MW Solar Power Project is to be installed in an allocated area

of 14.4 Acres of land within the premises of the AFK. The Solar power generated by
3 MW Solar project of BEL will be supplied to AFK at Rs.4.50 per unit. for 25 years.
c) The annual average consumption of AFK is 14.8 MUs and estimated annual
generation of 4.8 MUs from proposed 3 MW Solar Power Plant. Considering holidays
and some sporadic instances load may go below 3 MW and about 16% (i.e. about 0.8
MUs out of total estimated annual generation of 4.8 MUs) of total energy generated
over the year may flow to grid.
d) BEL is seeking relaxation for executing 3 MW Solar Power Project under the
provisions of MERC (Net Metering for Roof-top Solar Photo Voltaic Systems)
Regulations, 2015.
2) Advocate of MSEDCL stated that:
a) MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations,
2015 makes it applicable to a consumer of who intends to use a Rooftop Solar
Photovoltaic generating system having a capacity less than 1 MW.
b) The Commissioning in its recent amendment dated 21 July, 2017 to the
MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015
has not considered amending the capping of 1 MW capacity provided under this
Regulations for Solar Roof top Projects. Also, similar type of Petition filed by Nagpur
Metro Rail Corporation Ltd in Case No 133 of 2016 and the Case is reserved for
Order.
c) Since BEL is third party vender, AFK, Pune should have filed this Petition.
The Petition filed by BEL is not entitled for Net Metering as per the existing legal
provisions and shall be treated as IPP/RE generator.
The Commission has reserved the Case for final Orders.
7. BEL in its additional submission dated 12 January, 2018 (filed on 16 January, 2018)
has stated that;
1) During the hearing on 8 January, 2018 MSEDCL raised the following issues;
(i) BEL’s Case is similar to the Petition filed by Nagpur Metro Rail
Corporation Ltd. in Case No 133 of 2016.
(ii) BEL’s Petition is not valid for Net Metering facility for more than 1
MW as the Commission has not considered this in amendment in Regulations
issued on 21 July, 2017.
(iii) BEL is a third party and the generation project is not a captive power
plant.

2) The Case of Maharashtra Metro Rail Corporation Ltd.(MMRCL) in Case No
133 of 2016(name changed from Nagpur Metro Rail Corporation Ltd.) is
totally different in nature. Solar generation of MMRCL is at various locations
within its premises and may not match with the consumption in that location.
This situation of separation of load and generation does not qualify for facility
of Net Metering as per the definition of Eligible Consumer and the term
Premises used at number of places in the Regulations.
Whereas in BEL’s case the proposed project of 3 MW is within the premises
of the Ordnance Factory, namely AFK, where the sanctioned load is 5 MVA(5
MW) and the load of 5 MVA is being fed through two 11 kV Express Feeders
emanating from the 220 kV/22 kV/11 kV substation (referred to as MSEB-
512, within the premises of the consumer) and terminating in the factory
premises of the consumer at 11 kV Bus. Thus BEL shall use the same service
line from where the load of 5 MVA is being fed, for grid interaction and
injection of solar generation.
3) MSEDCL during the hearing held on 8 January, 2018 has stated that the
BEL’s Petition is not valid for Net Metering facility for more than 1 MW as
the Commission has not considered this in the amendment in Regulations
issued on 21 July, 2017. This averment of MSEDCL is distraction from the
main course. It may be stated that the in the amendment issued on 21 July,
2017 the points of consideration were limited.
4) MSEDCL during the hearing held on 8 January, 2018 has stated that BEL is a
third party and the generation project is not a captive power plant. In this
regard as already stated in its submissions dated 5 January, 2018 that its 3 MW
Solar Power Plant is 100% owned by Government of India (GoI), which is
being set up as per MNRE ‘Defence Scheme’ for development of total of 300
MW Grid connected Solar Power Plants in defence establishments, in the
premises of AFK, Pune one of the Ordnance factory Board (OFB). The project
has been taken up by the Ministry of Defence under National Solar Mission of
Government of India. This project is being executed through Defence PSU,
BEL, Bangalore. GoI (Central Government) has 67.94 % stakes in BEL as on
30 September, 2018. Both AFK and BEL come under Dept. of Defence
Production, Ministry of Defence, GoI. It is submitted that the project meets all
conditions of Captive power plant under Section 9 of the EA, 2003. It is
confirmed once again that, there is no sale of power to third party.
5) In view of above, the matter may be considered by the Commission for
according clearance under clause 13, power to relax of Net Metering
Regulations, 2015 for implementation of the instant 3 MW of Grid connected
Solar Power project in the premises of the Ammunition Factory, Khadki

(AFK), Pune with the facility of Net Metering based on specific merits of the
Case.
8. BEL in its additional submission dated 13 February, 2018 (filed on 20 February,
2018) has stated as below;
1) BEL has sought this matter for early consideration because of the following
reasons;
(a) The proposed Solar power project is time bound project of Ministry of
Defence (GoI) and as per the defence scheme of MNRE (Ref Annexure-1 of
the Petition) the project is required to be completed upto December, 2018.
(b) MSEDCL in response to our application for grid connectivity has
conveyed in the Technical feasibility Report vide letter dated 18 November,
2018 that; “ ---provision of 11kV new bay for power evacuation can be made
available by commissioning of 22/11 kV new S/stn in a space available
adjacent to premises of 220 kV Khadki S/Stn and that separate 11 kV bays can
also be provided for Ammunition Factory Khadki from this 22/11 kV S/Stn.”
(c) In this regard it is submitted that as the present load of 5 MW is
already connected through 22/11 kV express feeders we proposed to evacuate
3 MW through the 11 kV Bus within the premises of AFK, Khadaki which is
technically feasible as adequate transmission facility already exists. With this
arrangement, we submitted our alternative proposal on 27 November, 2017.
The matter needs to be considered under the provisions of para 2 of Section
9(2) of the EA, 2003. The cost of construction of new substation on the land to
be provided by user would be additionally about Rs.10 Crores on the project
with an estimated cost of Rs. 15 Crores.
(d) The Commission is empowered to intervene in the above matter as per
provisions under para 3 of Section 9(2) of the EA, 2003 and the functions of
the Commission for promoting Renewable sources of energy as per Section
86(e) of the EA, 2003.
2) Powers of the Commission in the Defence Projects:
(a) The proposed 3 MW solar project is being executed by the Department
of Defence Production (DDP) Ministry of Defence/GoI on its land in the
Ordnance AFK, Pune and in the present Case , the Petitioner has sought relief
from the Commission under the Net Metering Regulations, 2015for the
implementation for 3 MW of Grid connected Solar Power Project at
Ordinance AFK, Pune with the facility of Net Metering.

(b) The Commission is empowered to kindly consider for special
treatment and for relaxation of Regulations under Section 184 of the EA, 2003
which reads as;
‘Section 184. (Provisions of the Act not to apply in certain cases):
The provisions of this Act shall not apply to the Ministry or Department of the
Central Government dealing with defence, Atomic Energy or such other
similar Ministries or Departments or undertakings or Boards or institutions
under the control of such Ministries or Departments as may be notified by the
Central Governments.’
3) In view of above, the Commission is requested for early consideration for
implementation of the aforesaid time-bound project of the Ministry of
Defence/GoI and for passing its appropriate orders in the matter.
9. MSEDCL in its submission dated 14 May, 2018 (filed on 15 May, 2018) has stated as
below;
1) MSEDCL by way of abundant caution is filing the present submissions to the
additional written submission dated 13 February, 2018 filed by BEL.
MSEDCL understands that the captioned matter has been reserved for orders
vide Daily Order dated 8 January, 2018. However even after the same being
heard and reserved for orders, the Petitioner has been making additional
submissions time and again without even seeking leave of the Commission.
MSEDCL certainly does not support such practice and have strong objection
to such type of submissions of the Petitioner. However to safeguard its interest
against the additional issues raised by the Petitioner vide its subsequent
submissions, MSEDCL with abundant caution is craving leave of the
Commission to take the present submissions on record.
2) BEL requested for evacuation of Solar power from its proposed 3 MW solar
power project in the premises of AFK, Pune through 11 kV Bus within the
premises of AKF, Khadaki under Net Metering Regulations, 2015.
3) AFK, Pune is a HT Consumer bearing No. 170019000055 and fed through two
express feeders (AFK-I and AFK-II). BEL is going to establish 3 MW solar
project in the factory premises for the use of AFK.
4) Net Metering Regulations, 2015 makes it applicable to a consumer of
Distribution Licensee who intends to use a Rooftop Solar PV Generation
system having capacity less than 1 MW. Thus the Petitioner is not entitled for
Net Metering as per the existing legal provisions but be treated as IPP/RE
Generator. However the Petitioner can wheel the power from the said 3 MW

solar generator as per the provisions of DOA Regulations, 2016 to the eligible
consumer.
5) To avail Open Access, as per the present practice of MSEDCL, the power
from any generation is evacuated to the nearest EHV/HV substation through
dedicated feeder for proper/complete evacuation and accounting of power.
6) Accordingly as per joint site visit of MSEDCL, MSETCL authorities and BEL
representatives for grid connectivity of 3 MW solar plant, it is observed that a
separate 11 kV bay cannot be provided for power evacuation at 220 kV
Khadaki S/s. Hence, the evacuation is suggested by establishment of new
22/11 kV substation in factory premises for evacuation of 3 MW power. But
BEL has shown unwillingness to set up new 22/11 kV substation as suggested
by MSEDCL authorities and proposed alternate option for evacuation of 3
MW power on existing 11 kV AFK-I and AFK-II express feeders of AFK.
7) However the evacuation of power from any generator by connecting it to the
existing feeder is not allowed in view of the issues relating to safety and
proper accounting of power generated.
It is therefore prayed that the Commission may graciously be pleased to take the
additional submission of MSEDCL on record for consideration while passing the final
Order. It is further prayed that not to consider the present submissions of the
Petitioner and the Petition be dismissed.
10. The Commission has reserved this matter for final Orders vide its Daily Order dated 8
January, 2018. At the hearing held on 11 June, 2018, the Parties were informed of the
Commission’s decision to constitute a two Member Bench to re-hear and decide this
case. Parties gave their consent to further hearing of the matter as being in
continuance of the earlier proceedings.
11. The proceedings of the hearing held on 11 June, 2018 are summarized as follows:
1) The Representative of Bharat Electronics Ltd (BEL) stated that:
(a) The Project is to be implemented for captive use and not for third party sell.
The project is under Ministry of Defence Government of India (GoI) and
100% owned by GoI only. Project will be executed in Ordinance Factory,
Khadki, Pune
(b) The commission in its order dated 16 January, 2018 in Case No 133 of
2016 does not provided relaxation to Nagpur Metro Rail Corporation Ltd.

because generation is at one place and utilisation at other, whereas in case
of BEL generation and utilisation of power is at the same place.
(c) As per Section 184 of Electricity Act 2003, Provisions of the EA, 2003 are
not applicable to BEL as it is under Ministry of Defence, Government of
India.
(d) BEL is not seeking amendment to the regulation but relaxation for
executing 3 MW Solar Power Project under the provisions of MERC (Net
Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015.
2) Advocate of MSEDCL stated that
(a) At the time of framing these regulations, views from various stake holders,
distribution companies have been taken into account and the Regulations
are notified after public consultation process with statement of reasons for
the same.
(b) As per the Commission’s “Net Metering for Roof-top Solar Photo Voltaic
Systems Regulations, 2015” Net Metering facility for more than 1 MW is
not permissible. So permission cannot be granted.
(c) BEL is now seeking amendment to the Net Metering for Roof-top Solar
Photo Voltaic Systems Regulations, 2015.The Commission in its Order
dated 16 January, 2018 in Case No 133 of 2017 has specifically mentioned
the logic behind fixing the capacity limit of 1 MW and implication on
Distribution Licensees.
(d) Based on this case, the Commission may take a view whether to initialize
the process for amendment to the regulation or otherwise.
Commission’s Analysis and Rulings
12. The Commission notes that BEL being a Developer of the Solar project in the
premises of AFK has filed the present Petitions seeking relaxation for executing
its 3 MW Solar Power Project under the provisions of MERC (Net Metering for
Roof-top Solar Photo Voltaic Systems) Regulations, 2015. The Commission notes
that under the present Case BEL has stated that, Ministry of Defence approved a
proposal vide letter dated 7 March, 2016 for setting up 150 MW grid connected
Solar Power Plants through BEL on the lands provided by Ordnance Factories.
Further, AFK, Pune has been identified under the Defense scheme, for setting up
of grid interactive 3 MW PV Solar Power Plant. The Commission notes the fact
that AFK, Pune is an existing consumer of MSEDCL having 5 MVA sanctioned
contract demand and BEL has been selected as Project Developer for installation
of 3 MW Solar power project in AFK’s premises.
13. BEL has stated that, the solar power generated by its 3 MW Solar project will be
supplied to AFK at Rs.4.50 per unit for 25 years. The annual average

consumption of electricity in AFK, Pune is 14.8 MUs and estimated annual
generation of 4.8 MUs from proposed 3 MW Solar Power Plant. As per
estimation, about 16% of total energy generated over the year may flow to grid
(i.e. about 0.8 MUs out of total estimated annual generation of 4.8 MUs)
14. However, the Net Metering Regulations, 2015 (as amended in 2017 to cover both
Solar and other RE) are applicable to an Eligible Consumer who uses a RE
Generating System with capacity below 1 MW in its premises to meet all or part
of its own electricity requirement through a Net Metering Arrangement. In such
an Arrangement, a RE Generating System with a Net Meter at a consumer’s
premises delivers surplus electricity to the Distribution Licensee after setting off
the electricity supplied to the consumer by the Licensee. The Regulations define
‘Eligible Consumer’ as follows:
“2.1(g) “Eligible Consumer” means a consumer of electricity in the area of supply
of the Distribution Licensee who uses or intends to use a Renewable Energy
Generating System having a capacity less than 1 MW, installed on a roof-top or any
other mounting structure in his premises, to meet all or part of his own electricity
requirement, and includes a Consumer catering to a common load such as a
Housing Society;
Provided that such generating System may be owned and/or operated by such
Consumer, or by a third party leasing such System to the Consumer;”
15. Moreover, Regulation 10.3 of these Regulations provides that the unadjusted net
credited units of electricity as at the end of each financial year shall be purchased
by the Distribution Licensee at its Average Cost of Power Purchase as approved
by the Commission for that year. Thus Net Metering Regulations provides for
netting of Solar energy (between consumption and injection) and does not
envisaged direct sale of Solar energy from Solar Generator to the eligible
consumer. Further it is envisaged that Distribution Licensee shall purchase only
the unadjusted net surplus energy from the eligible consumer (who is also acting
as a Solar Generator) at the Average Cost of Power Purchase at the end of each
financial year. Whereas under the present Case BEL has proposed to sell the
Solar power generated by its 3 MW Solar project to AFK at Rs.4.50 per unit for
25 years. Such a sale is not envisaged under the Net Metering arrangement
under the provisions of Net Metering Regulations, 2015.
16. Further the Commission also notes that, BEL who is a Developer of the Solar
project in the premises of AFK, has filed the present Petition seeking relaxation
for executing its 3 MW Solar Power Project under the provisions of Net
Metering Regulations, 2015. In fact AFK, Pune who is a HT connection
Consumer (SC. No. 170019000055) of MSEDCL, would be an Eligible Consumer
under the provisions of Net Metering Regulations, 2015 for Net Metering

arrangement as cited above and should have filed the present Petition, which is not
the Case.
17. The Commission also notes MSEDCL submission dated 28 December, 2017 that,
BEL being a Developer of the Solar project of 3 MW in the premises of AFK , is
not entitled for net metering arrangement as the Net Metering Regulations, 2015
is applicable to Roof-top Solar PV system having a capacity less than 1 MW.
MSEDCL stated that BEL be treated as IPP/RE generator which is a third party
entity installing and owning the Solar plant and sale of power to AFK through a
supply agreement at the rate of Rs. 4.50 per unit for 25 years. Such an
agreement amounts to clear third party sale. In light of MSEDCL’s submission
the Commission observes that BEL can apply for and avail of various regulatory
provisions of Distribution Open Access Regulations along with Net Metering
Regulations, 2015, so as to serve its purpose.
18. The Commission observes that BEL in its additional submission dated 13
February, 2018 and also during the hearing held on 11 June, 2018 has raised an
issue of special treatment and for relaxation of Net Metering Regulations, 2015
under section 184 of the EA, 2003 which is reproduced below;
“184. Provisions of Act not to apply in certain cases
The provisions of this Act shall not apply to the Ministry or Department of the
Central Government dealing with Defence, Atomic Energy or such other similar
Ministries or Departments or undertakings or Boards or institutions under the
control of such Ministries or Departments as may be notified by the Central
Government.”
The Commission notes that AFK Pune has been and continues to be a HT
consumer of MSEDCL and is covered by various provisions of the EA, 2003 and
its Regulations relating to metering, billing, theft, etc. AFK, Pune cannot take
cover of the provisions under section 184 of the EA, 2003 as per its convenience.
Besides, since BEL is a Developer of the Solar project the said provision of
section 184 of EA, 2003 will not be applicable to it. Plain reading of the section
184 does not imply that there could be relaxation of provisions of Net Metering
Regulations, 2015 as contended by the Petitioner i.e. BEL. In fact, as stated,
above under the present Case even an eligible consumer i.e. AFK, Pune who is a
HT connection Consumer (SC. No. 170019000055) of MSEDCL cannot claim
exemption under section 184 of the EA, 2003.
The moment a consumer of electricity becomes a consumer of a particular
Distribution Licensee, the Commission’s Regulations become applicable. It is
imperative therefore that AFK, Pune as a HT Consumer of MSEDCL is also
bound by the provisions of the EA, 2003 and the relevant Regulations issued by
the Commission from time to time. The contention of BEL seeking special

treatment and for relaxation of Net Metering Regulations, 2015 under section
184 of the EA, 2003 would not sustain and deserves to be rejected as such.
19. The Commission in the recent past by its Order dated 16 January, 2018 in Case
No 133 of 2016(Petition of Maharashtra Metro Rail Corporation Ltd. seeking
relaxation in the capacity limits for eligibility under the Roof-top Solar PV Net
Metering Regulations, 2015) has discussed in detail the rationale for prescribing
the capacity limit of Solar PV plant upto 1 MW under Net Metering Regulations,
2015. Commission did not provide any relaxation to Maharashtra Metro Rail
Corporation Ltd. the Petitioner in that case with regards to capacity limit of 1
MW for Solar PV system under Net Metering Regulations, 2015.
20. In view of foregoing, the Commission deems it fit to reject the contention of
BEL for availing the facility of Net Metering under the provisions of Net
Metering Regulations, 2015 upon implementation of its 3 MW Grid Connected
Solar power project at Ordinance Ammunition Factory, Khadki (AFK), Pune .
The Petition of Bharat Electronics Limited in Case No.160 of 2017 stands disposed of
accordingly.
Sd/- Sd/-
(Mukesh Khullar) (Anand B. Kulkarni)
Member Chairperson

Order 160 of 2017-15062018

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Order 160 of 2017-15062018