Verification of compliance of renewable purchase obligation

Order Case No.207 of 2017 Page 1
Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
13th
Floor, Centre No.1, World Trade Centre, Cuffe Parade, Mumbai - 400 005
Tel: 022-22163964/65/69 Fax: 022-22163976
E-mail: mercindia@merc.gov.in
Website: www.merc.gov.in / www.mercindia.org.in
Case No. 207 of 2017
In the matter of
Verification of compliance of Renewable Purchase Obligation targets by Maharashtra
State Electricity Distribution Co. Ltd. for FY 2016-17
Coram
Shri. Anand B. Kulkarni, Chairperson
Shri. I.M. Bohari, Member
Shri Mukesh Khullar, Member
Parties
1. Maharashtra State Electricity Distribution Co. Ltd (MSEDCL)
2. Maharashtra Energy Development Agency (MEDA)
3. Maharashtra State Load Despatch Centre (MSLDC)
Appearance
1. MSEDCL : Shri.S.S.Rajput
2. For MEDA : Shri. Manoj Pise
3. For MSLDC : None
4. For Consumer Representative : Dr. Ashok Pendse, TBIA
ORDER
Date: 31 July, 2018
1. The MERC (Renewable Purchase Obligation, its Compliance and Implementation of
Renewable Energy Certificate Framework) Regulations, 2016 (‘RPO Regulations 2016’)
specify the Renewable Purchase Obligation (RPO) targets for Obligated Entities,
including Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) as Distribution
Licensee, for FY 2016-17. The RPO targets specified in Regulation 7.1 are as below:
Year Quantum of purchase (in %) from
Renewable Energy sources (in terms of
energy equivalent in kWh)
Solar Non-Solar
(other RE)
Total
(a) (b) (c)
2016-17 1.00% 10.00% 11.00%
2017-18 2.00% 10.50% 12.50%
2018-19 2.75% 11.00% 13.75%

Year Quantum of purchase (in %) from
Renewable Energy sources (in terms of
energy equivalent in kWh)
Solar Non-Solar
(other RE)
Total
2019-20 3.50% 11.50% 15.00%
Provided that each Distribution Licensee shall meet 0.2% per year of its Non-solar
(other RE) RPO target percentage for the period from FY 2016-17 to FY 2019-20 by
way of purchase from Mini Hydro or Micro Hydro Power Projects;
2. Regulation 12 of the RPO Regulations, 2016 empowers the Commission to deal with
shortfalls in compliance of RPO targets by Obligated Entities as follows:
“12. RPO Regulatory Charges
12.1 If the Obligated Entity fails to comply with the RPO target as provided
in these Regulations during any year and fails to purchase the required
quantum of RECs, the State Commission may direct the Obligated Entity to
deposit into a separate fund, to be created and maintained by such
Obligated Entity, such amount as the Commission may determine on the
basis of the shortfall in units of RPO, RPO Regulatory Charges and the
Forbearance Price decided by the Central Commission; separately in
respect of Solar and Non-Solar RPO:
Provided that RPO Regulatory Charges shall be equivalent to the
highest applicable preferential tariff during the year for Solar or Non-
Solar RE generating sources, as the case may be, or any other rate as may
be stipulated by the State Commission:
Provided further that the fund so created shall be utilised, as may be
directed by the State Commission."
3. Through its Order dated 1 July, 2010 in Case No. 21 of 2010, the Commission designated
the Maharashtra Energy Development Agency (MEDA), Pune as the State Agency to
undertake the functions envisaged under the Regulations.
4. As per Regulation 10.4 of the RPO Regulations, 2016, a Distribution Licensee is required
to submit, at the end of each financial year, a detailed statement of energy procured from
Renewable Energy (RE) sources, certified by its auditors.
5. Vide its Order dated 27 March, 2018 in Case No. 169 of 2016 regarding compliance of
RPO targets by MSEDCL for FY 2015-16, the Commission had stated as follows:
“ Solar RPO
27. In its previous Orders, the Commission had allowed MSEDCL to carry
forward its earlier Solar RPO shortfall of FY 2010-11 to FY 2012-13 and to
meet it by the end of FY 2015-16. During these proceedings, MSEDCL has
elaborated its plans and the steps it is taking to ramp up Solar power
procurement to fulfill its RPO, and expects results in subsequent years. While

there has been some improvement in both absolute and percentage terms
against the stand-alone Solar RPO target in FY 2015-16 as compared to
previous years, in no year from FY 2010-11 to FY 2015-16 has MSEDCL
achieved its Solar RPO. Consequently, the cumulative shortfall has been
increasing. As the Commission had observed while declining to condone the
shortfall in FY 2014-15, in FY 2015-16 also it cannot at all be claimed that
sufficient Solar power was not available for purchase. Moreover, as in the
past, MSEDCL also had the option of purchasing RECs at intervals of its
choosing for advantageous rates in that year, but chose not to do so either. In
these circumstances, the Commission finds no justification for the Solar RPO
shortfall in FY 2015-16.
28. The Commission also notes that, on the other hand, in its subsequent Petition
in Case No. 106 of 2016, MSEDCL has sought that its Solar RPO target be
increased and the Non-Solar target be correspondingly reduced.
Non-Solar RPO (excluding Mini/Micro Hydro)
29. As the Commission has concluded earlier in this Order, MSEDCL has fulfilled
its stand-alone Non-Solar RPO for FY 2015-16 and also met its cumulative
shortfall. The surplus is not substantial, and shall be taken into account by the
Commission against the compliance of RPO targets for subsequent years.
However, in the forthcoming RPO compliance verification proceedings for FY
2016-17, MSEDCL should clearly segregate the RE procurement and/or REC
purchase in that year which have been counted against its shortfall of earlier
years, as was permitted by the Commission, from the quantum considered
against the RPO target for FY 2016-17.
Mini/Micro Hydro RPO
30. MSEDCL has also consistently fallen short of its separate sub-target for the
Mini/Micro Hydro component of the Non-Solar RPO. In the compliance
verification Order for FY 2013-14 in Case No. 190 of 2014, the Commission
had acknowledged the difficulties in achieving the Mini/Micro Hydro RPO,
and asked MSEDCL to make up its cumulative shortfall by the end of FY 2015-
16 along with the stand-alone target for that year. The Commission had not
accepted MSEDCL’s proposal to purchase Non-Solar RECs in lieu of
Mini/Micro Hydro power since that would defeat the purpose of specifying a
separate target.
31. However, the Commission recognizes the persisting constraints on MSEDCL
fulfilling its Mini/Micro Hydro RPO target, and the status of availability and
capacity addition in the State. There continue to be issues with regard to this
segment. The Commission also notes that the new RPO Regulations, 2016
(applicable from FY 2016-17) allow shortfalls against the Mini/Micro Hydro
target to be met through Non-Solar RECs if the Distribution Licensee shows
that it has made sufficient efforts. This provision was introduced considering

the inadequate availability of such resources at present and the absence of
RECs specific to Mini/Micro Hydro power.
32. As regards the period prior to FY 2016-17 not covered by this enabling
provision in the RPO Regulations, in its Petition in Case No. 30 of 2016 citing
similar circumstances, Reliance Infrastructure Ltd. (Distribution) (RInfra-D)
had sought that its Mini/Micro Hydro RPO target for FY 2010-11 to FY 2015-
16 be waived, or be allowed to be met through Non-Solar RECs. In its Order
dated 30 March, 2016, the Commission provided the following dispensation to
RInfra-D:
“7. Considering the circumstances cited by RInfra-D, the Commission
considers it appropriate to address the consequent difficulty under the
RPO Regulations, 2010 by allowing RInfra-D to compensate for the
shortfall in meeting its Mini/Micro Hydro RPO targets for the period
from FY 2010-11 to FY 2015-16 by purchase of Non –Solar RECs to that
extent…”
With regard to the other Distribution Licensees, the Order stated as follows:
“8. The Commission notes that, separately, hearings have been held
recently regarding the verification of RPO compliance by Distribution
Licensees, including RInfra-D, and those matters are awaiting final
Orders by the Commission. While similar issues regarding the
Mini/Micro Hydro targets have been raised in those proceedings by some
Licensees, those Cases pertain to FY 2014-15 while RInfra-D has
specifically approached the Commission for the period upto FY 2015-16
through this separate Petition. As regards the other Licensees, the
Commission would provide a suitable dispensation as may be
appropriate through its Orders in those Cases.”
33. In Case No. 190 of 2014, the Commission had allowed MSEDCL to meet its
cumulative Mini/Micro Hydro RPO shortfall upto FY 2013-14 by FY 2015-16.
Neither this shortfall nor the stand-alone targets were met in FY 2015-16 for
the reasons cited in these proceedings. However, considering the above
discussion and its powers of relaxation and removal of difficulties under
Regulations 18 and 20 of the RPO Regulations, 2010, the Commission allows
MSEDCL to meet this shortfall by purchase Non-Solar RECs (or additional
Mini/Micro Hydro power, if available) by the end of FY 2018-19) to meet any
shortfall still remaining for the period upto FY 2015-16.
RPO Regulatory Charges
34. In its Judgment dated 20 April, 2015 in O.P. No. 1, 2 and 4 of 2013 and IA No.
291 and 420 of 2013, the APTEL has given the following among other
directions regarding RPO compliance:
“28… ii) …If the distribution licensee is not able to tie up procurement of
renewable energy to meet the RPO target, it may plan to purchase RECs to
meet its RPO target as per the provisions of the Regulations. Advance
planning of REC purchase will give opportunity to the distribution

licensees/other obligated entities to purchase REC when the market
conditions are more favourable to them...
(iv) The State Commission shall give directions regarding, carry
forward/review in RPO and consequential order for default of the
distribution licensees/other obligated entities as per the RPO Regulations. If
the Regulations recognise REC mechanism as a valid instrument to fulfill the
RPO, the carry forward/review should be allowed strictly as per the
provisions of the Regulations keeping in view of availability of REC. In this
regard the findings of this Tribunal in Appeal no. 258 of 2013 and 21 of 2014
may be referred to which have been given with regard to RE Regulations of
Gujarat Commission but the principles would apply in rem. In case of default
in fulfilling of RPO by obligated entity, the penal provision as provided for in
the Regulations should be exercised…
(vi) The provisions in Regulations like power to relax and power to remove
difficulty should be exercised judiciously under the exceptional
circumstances, as per law and should not be used routinely to defeat the
object and purpose of the Regulations.”
This is also essentially in line with the earlier APTEL Judgment dated 25 April,
2014 in Appeal No. 24 and IA No. 39 of 2013.
35. As discussed earlier, the Commission finds no justification or mitigating
circumstances for MSEDCL’s shortfall against its stand-alone Solar RPO
Solar target, and the cumulative shortfall as at the end of FY 2015-16 has
increased. In similar circumstances pertaining to the stand-alone shortfall of
FY 2014-15, the Commission, in its Order in Case No. 16 of 2016, had directed
MSEDCL to create a RPO Regulatory Charges Fund under Regulation 12 of
the RPO regulations, 2016 (quoted at para. 2 earlier in this Order).
36. On similar lines, the Commission directs MSEDCL as follows with regard to
the stand-alone and cumulative shortfall against its Solar RPO targets in FY
2015-16:
1) MSEDCL shall constitute a notional ‘RPO Regulatory Charges Fund’;
2) The Fund shall be utilised by MSEDCL to purchase Solar power and/or
RECs so as to fully meet its shortfall of FY 2015-16 by the end of March,
2019, and the amounts of the Fund shall be determined by MSEDCL
accordingly from time to time;
3) Considering the circumstances set out in this Order which have led the
Commission to invoke Regulation 12, the expenditure expected for purchase
of RECs and/or power procurement from the Fund shall not be passed
through to consumers to the extent of the shortfall not met by MSEDCL by
the end of FY 2018-19.

4) The performance of MSEDCL in this regard shall be reviewed in future
RPO compliance verification proceedings and also taken into account in the
relevant Tariff proceedings.
The Commission has not specified the amounts to be deposited in the Fund since
that will depend on the power procurement and/or REC purchase mix opted for by
MSEDCL, the actual rate of RECs in the market from time to time, etc. Moreover,
MSEDCL need not deposit into the Fund the entire amount estimated to be
required in a lumpsum at the outset, but spread it over the remainder of the year
depending on its assessment of the market. The Fund is notional in that sense.
6. In accordance with Regulation 9.5, MEDA, vide its letter dated 20 November, 2017,
submitted the RPO settlement data for FY 2016-17 in respect of MSEDCL. MSEDCL’s
RPO compliance position for this period as submitted by MEDA is summarized below:
TABLE 1: RPO Settlement Data for MSEDCL as furnished by MEDA
Cumulative RPO
(Surplus)/ Short fall till end
of earlier control perod
(FY 2010-11 to FY 2015-
16
Cumulative RPO
(Surplus)/ Short fall till
end of FY 2016-17
MUs % MUs MUs
Gross Energy
consumption
100% 111536.83
Target 2285.51 1.00% 1115.368 3400.878
Achivement 925.76 0.38% 425.5043 1351.264
Shortfall /(Surplus) 1359.750 0.619% 689.864 2049.614
Target 45755.720 10.00% 11153.683 13439.193
Achivement 45789.875 8.37% 9331.6928 10257.453
Shortfall /(Surplus) -34.155 1.63% 1821.990 1787.835
Target 72.970 0.20% 22.307 95.277
Achivement 4.40 0.01% 0.6258 5.026
Solar RPO
Non-Solar RPO
Mini-Micro RPO (Within Non-Solar)
RPO settlement data for MSEDCL as furnished by MEDA
Item
FY 2016-17
7. According to MEDA, MSEDCL has not fulfilled its Solar, Non-Solar and Mini /Micro
Hydro Power RPO targets of FY 2016-17.
8. The Commission asked MSEDCL to submit its response to the data furnished by MEDA.
In its response dated 1 January, 2018, MSEDCL stated as follows:
8.1 As regards the discrepancies between the data submitted by MEDA and
MSEDCL, MSEDCL in its reply stated that:

i) Gross Energy Consumption (GEC) submitted by MSLDC to MSEDCL/MEDA
is 116169 MUs, which is inclusive of the consumption by Open Access (OA)
consumers. Also, MSEDCL’s RE procurement and OA consumption are
considered by grossing up for losses at Transmission periphery i.e. G<>T
Interface in line with MERC Order dated 14 September, 2016 in Case No. 16 of
2016.The total OA consumption for FY 16-17 was 9004 MUs. The actual GEC
of MSEDCL (excluding OA Consumption) at G<>T Interface is 111536 MU.
After submission of above data by MEDA, MSEDCL had procured 18,22,000
nos. non-Solar RECs equating to 1822 MUs and fulfilled its non-Solar targets,
but has shortfall in Solar RECs as CERC vide letter dated 20 July,2017 has
informed that trading on Solar REC is suspended until further Orders due to stay
Order by the Supreme Court. MSEDCL requests the Commission to allow
MSEDCL to carry forward the Solar shortfall and to meet all Solar shortfall by
the end of FY 2019-20
8.2 As regards the action taken prior to and during FY 2016-17 to meet the RPO
targets:
Non-Solar:
MSEDCL has always encouraged RE Generation in the State and has executed
long term EPAs with all the RE (non-Solar) Generators approaching it at
preferential tariff. It has executed long term EPA to the tune of 5989 MW as on
31 March, 2017 with non-Solar generators. Expected RE procurement for FY 16-
17 from non-solar RE sources was 14,204 Mus.
Solar:
MSEDCL has executed long term PPAs for total capacity of 1327 MW as on 31
March, 2017. Also to meet the shortfall in fulfillment of Solar RPO target,
MSEDCL had given consent to projects with total Capacity of 500 MW to
MSPGCL Solar plant through EPC route. Further, as per MNRE Roof top Solar
Program, 4700 MW grid connected Solar rooftop projects will be installed in the
state upto 2022 and the Power from these projects shall be accounted under Solar
RPO. However, since the technology & implementation is in its initial phase,
only 26 MW of rooftop Solar capacity had been installed as on March,2017.
Nevertheless, with enhanced adoption of technology and the falling panel prices,
it is anticipated that the Solar Rooftop installations will accelerate in the coming
years.
Mini-Micro Hydro:
Till March 2017, only three generators had executed EPA. The projects are
Shahanoor (0.75 MW), Yeoteshwar (0.075 MW) and Terwanmedhe, MSPGCL
(0.2 MW). The Commission is requested to consider the ground realities that
very less capacity available from Mini-Micro Hydro, hence may cancel the
separate categorization of Mini/Micro Hydro RPO target
8.3 As regard long term RE procurement plan MSEDCL has contracted sufficient RE
power capacity (Wind, Bagassee Co-gen, Biomass, SHP,MSW and Mini – Micro
Hydro). Expected capacity as on 31 March, 2018 to the tune of 6681 MW.
Considering the actual CUF normative, around 16532 MU of RE is expected to

be generated and procured by MSEDCL. MSEDCL will resort to Short Term
power procurement from RE Sources and/or purchase of REC to fulfill the RPO
target
Short Term Power Procurement
Short term power procurement tender for 100 MW Solar and 200 MW Wind
power was floated through DEEP portal for period of 1 year upto 31 October
2018, on 29 September, 2017 for competitive bidding (with e-reverse
auction).After finalization of tender process, only 56.4 MW non-solar power
available and PPA executed with wind power projects from Dec-2017.
Long Term Power Procurement
MSEDCL has initiated long term RE procurement from different sources for
meeting the RPO target as detailed below. It is expected that these capacities will
be commissioned in FY 2017-18 & FY 2018-19.
Non Solar
i. Wind Energy 500 MW
MSEDCL has floated tender on 21 December 2017 for procurement of 500 MW
wind power through competitive bidding process on long term basis in line with
MoP Guidelines dated 8 December,2017 on TCIL web portal.
ii. Bagasse based Co-gen 500 MW
MSEDCL has decided to procure 500 MW power on long term basis from
Bagasse based Cogeneration basis in steps of 100 MW through competitive
bidding process. In line to the above, MSEDCL has floated tender for long term
procurement of 100 MW Bagasse based Co-generation power on TCIL web
Portal through Competitive bidding (reverse auction) on 06.11.2017
Solar Energy
MSEDCL has given in principle consent for procurement of long term power
from following Solar Power Generators.
 Solar park at Dondaiycha by MSPGCL – 500 MW
 SECI (Phase II, Batch IV) – 500 MW
 Chief Minister AG feeder solarization scheme of GoM, executed by
MSPGCL – 200 MW
 EESL Solar Project to be installed on spare land of MSEDCL
substations– 200 MW.
 MSEDCL has floated tender on 21December,2017 for procurement of
1000 MW Solar power through competitive bidding process on long term
basis in line with MoP Guidelines dated 3 August,2017 on TCIL web
portal.
MSEDCL has fulfilled the non-solar RPO target given by the Commission for FY
2016-17. However there is shortfall in meeting Solar RPO target due to short supply
of power by generators vis-a-vis CUF and non-availability of Solar REC in market.
MSEDCL humbly requests the Commission to allow to carry forward the previous
years’ shortfall in Solar RPO upto FY 2019-20. MSEDCL further submits that the
recent consents given to MSPGCL/SECI and own power procurement tenders in
process regarding Solar Power projects in pipeline shall result in adequate availability
of Solar Power by FY 2019-20. The tied up capacity shall be sufficient to meet the

cumulative shortfall till FY 2019-20.
8.4 The GEC and RPO achievement of MSEDCL in FY 2016-17 is set out in the
Table below.
TABLE 2: RPO Target Achievement and Energy Consumption, as submitted by
MSEDCL
Particulars
FY2016-17
% MU
Gross Energy Consumption 100% 111536.83
Solar RPO
Target
1% 1115.368
Achievement
0.38% 425.5043
Shortfall/(Surplus)
689.864
Non-Solar RPO
Target (Less Mini-Micro)
10.00% 11153.68
Achievement 10.00% 11153.68
Shortfall/(Surplus)
0.00
Mini/Micro RPO
(Within Non-Solar)
Target
0.20%
22.307
Achievement
0.01% 0.6258
Shortfall/(Surplus)
21.682
Regulatory Process
9. Through a Public Notice dated 20 June, 2018 published in the Loksatta and Maharashtra
Times (Marathi) and Times of India and Indian Express (English) daily newspapers, the
Commission invited suggestions and objections considering the submissions of MEDA
and MSEDCL. The Commission also impleaded MEDA and MSLDC as Parties. A Public
Hearing was held on 12 July, 2018 in the Office of the Commission at World Trade
Centre, Cuffe Parade, Mumbai.
10. The summary of RPO compliance of MSEDCL for FY 2016-17, based on details provided
by MEDA and MSEDCL, is at Annexure-1 of this Order. The list of persons who gave
their comments in writing or made oral submissions during the Public Hearing is at
Annexure-2 (A). The list of persons present at the Public Hearing is at Annexure-2(B).
(These lists include persons/organizations concerned with the RPO compliance
verification hearings held the same day in respect of the other Distribution Licensees
also.)

11. At the Public Hearing, MSEDCL reiterated the points regarding its compliance of RPO
targets made in its written submissions.
Suggestions/Objections received (including those presented orally at the Public Hearing)
12. Thane-Belapur Industries Association (TBIA, an authorised Consumer Representative
(Dr. Ashok Pendse)
Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL), could have purchased
the RECs which were available in the market at cheaper rate for fulfillment of its RPO
targets. Also, like Distribution Licensees and Deemed Distribution Licensees the
Commission should initiate RPO compliance verification of Open Access Consumers
and Captive Power Plant Users as well.
Commission’s Analysis and Ruling
13. The Commission notes that after MEDA’s submission dated 20 November, 2017 to
the Office of the Commission for MSEDCL’s RPO settlement data for FY 2016-17,
MSEDCL has purchased 1822000 non-Solar RECs ( i.e. equivalent to 1822 MUs) on
29 November, 2017 and 27 December, 2017. MSEDCL in its written submission
dated 1 January, 2018 has indicated the same and again reaffirmed it to MEDA vide
its email dated 20 July, 2018. MEDA endorsed the MSEDCL’s data while submitting
the same to the Commission vide its e-mail dated 20 July, 2018.
14. The status of achievement of RPO targets by MSEDCL, as approved by the
Commission based on the details provided by MEDA and MSEDCL, is shown in
Table 3 below:
Table 3: RPO Settlement Details for MSEDCL, as approved by Commission

Cumulative RPO
(Surplus)/ Short fall till end
of earlier control perod
(FY 2010-11 to FY 2015-
16
Cumulative RPO
(Surplus)/ Short fall till
end of FY 2016-17
MUs % MUs MUs
Gross Energy
consumption 100%
111536.83
Target 2285.51 1.00% 1115.368 3400.878
Achivement 925.76 0.38% 425.5043 1351.264
Target 45755.720 10.00% 11153.68 56909.403
Achivement 45789.875 10.00% 11153.68 56943.555
Shortfall /(Surplus) -34.155 0.00% 0.00 -34.152
Target 72.970 0.20% 22.307 95.277
Achivement 4.40 0.01% 0.6258 5.026
Solar RPO
Non-Solar RPO
Mini-Micro RPO (Within Non-Solar)
RPO settlement data for MSEDCL (Approved)
Item
FY 2016-17
‘-’ or ( ) indicates surplus
15. The Commission notes that MSEDCL has
i. Fallen short of its stand-alone Solar RPO target by 689.86 MUS for FY
2016-17, and a cumulative shortfall of 2049.614 MUs
ii. Fulfilled exactly its stand-alone non-Solar RPO target of FY 2016-17 and
has a cumulative surplus of 34.152 MUs.
iii. Fallen short of its stand-alone Mini/Micro target by 21.682 MUs for FY
2016-17 and a cumulative shortfall of 90.252 MUs.
Solar RPO
16. In its previous Orders, the Commission had allowed MSEDCL to carry forward its
earlier Solar RPO shortfall of FY 2010-11 to FY 2012-13 and to meet it by the end of
FY 2015-16. In earlier control period (starting from FY 2010-11 to FY 2015-16),
MSEDCL had fallen short of its Solar RPO target and at the end of control period
it has cumulative Solar RPO shortfall of 1359.75 MUs. During the present
proceedings MSEDCL has stated that it has achieved 425 MUs Solar RPO target for
FY 2016-17 but still has standalone shortfall of 689.86 MUs. MSEDCL has requested
to allow it to carry forward the Solar shortfall to meet all Solar shortfall by end of
FY 2019-20 by giving the reason for its non-fulfillment of Solar RPO target for
FY2016-17 in light of the stay of the Supreme Court on trading of Solar RECs. To
elucidate the effort taken by it to fulfill the Solar RPO targets and its long term

planning for meeting Solar RPO targets, MSEDCL stated that it has executed long
term Power Purchase Agreements (PPAs) for total capacity of 1327 MW, floated
tenders of about 300 MW capacity for short term power procurements through
Competitive Bidding and also given in principle consent for procurement of long
term Power from some generators and floated a tender for 1000 MW through
Competitive Bidding for long term procurement. The Commission notes MSEDCL’s
plan and its conspicuous efforts taken by it to ramp up Solar power procurement to
fulfill its Solar ROP targets for subsequent years.
Non-Solar RPO( excluding Mini/Micro Hydro)
17. The Commission notes that MSEDCL has fulfilled its stand-alone non-Solar RPO for
FY 2016-17 and also met its cumulative non-Solar RPO target with surplus of 34.15
MUs. MSEDCL has stated that it has executed long term EPA to the tune of 5989
MW as on 31 March, 2017 with non-Solar generators. Expected RE procurement for
FY 16-17 from non-Solar RE sources was 14,204 MUs however due to natural factors
(beyond the control of MSEDCL) the actual generation is reduced leading to
shortfall in meeting non-Solar RPO targets, which was in turn met out by MSEDCL
by purchasing non-Solar RECs.
Mini/Micro Hydro RPO
18. In the past control period MSEDCL had fallen short of its separate sub-target for the
Mini/Micro Hydro component of the Non-Solar RPO. In fact during the compliance
verification proceedings for FY 2013-14 in Case No. 190 of 2014, the Commission had
acknowledged the difficulties in achieving the Mini/Micro Hydro RPO, and asked
MSEDCL to make up its cumulative shortfall by the end of FY 2015-16 along with the
stand-alone target for that year. There continue to be issues with regard to this
segment. The Commission recognizes those persisting constraints faced by MSEDCL
in fulfilling its Mini/Micro Hydro RPO targets, and the status of availability and
capacity addition in the State in that regard. The Commission also notes that the new
RPO Regulations, 2016 (applicable from FY 2016-17) allow shortfalls against the
Mini/Micro Hydro target to be met through Non-Solar RECs if the Distribution
Licensee shows that it has made sufficient efforts. This provision was introduced
considering the inadequate availability of such resources at present and the absence of
RECs specific to Mini/Micro Hydro power.
19. Therefore, in Case No. 190 of 2014, the Commission had allowed MSEDCL to meet its
cumulative Mini/Micro Hydro RPO shortfall upto FY 2013-14 by FY 2015-16. Neither
this shortfall nor the stand-alone targets were met during FY 2015-16. Accordingly,
the Commission in its Order dated 27 March, 2018 in Case No. 169 of 2016 for RPO
compliance verification for FY 2015-16 had allowed MSEDCL to meet the shortfall by
purchase Non-Solar RECs (or additional Mini/Micro Hydro power, if available) by
the end of FY 2018-19 to meet any shortfall still remaining for the period upto FY
2015-16. The Commission observes that MSEDCL has not exercised the option of
compensating for the shortfall in meeting Mini/Micro Hydro RPO target till FY 2015-
16 by purchasing non-Solar RECs. MSEDCL however, requested that as very less
capacity is available from Mini/Micro Hydro projects the Commission can consider

cancelling the separate categorisation of Mini/Micro Hydro RPO target. MSEDCL’s
request cannot be accepted since the option of non-Solar REC’s has already been
provided to all Obligated Entities if at all power is not available from Mini/Micro
Hydro projects. Considering the above discussion and its powers of relaxation and
removal of difficulties under Regulations 16 and 19 of the RPO Regulations, 2016, the
Commission allows MSEDCL to meet this shortfall by the end of FY 2018-19 by
purchase of Non-Solar RECs (or additional Mini/Micro Hydro power, if available) to
meet any shortfall still remaining for the period upto FY 2016-17.
RPO Regulatory Charges
20. In its Judgment dated 20 April, 2015 in O.P. No. 1, 2 and 4 of 2013 and IA No. 291
and 420 of 2013, the APTEL has given the following among other directions regarding
RPO compliance:
“28… ii) …If the distribution licensee is not able to tie up procurement of
renewable energy to meet the RPO target, it may plan to purchase RECs to meet its
RPO target as per the provisions of the Regulations. Advance planning of REC
purchase will give opportunity to the distribution licensees/other obligated entities
to purchase REC when the market conditions are more favourable to them...
(iv) The State Commission shall give directions regarding, carry forward/review in
RPO and consequential order for default of the distribution licensees/other
obligated entities as per the RPO Regulations. If the Regulations recognise REC
mechanism as a valid instrument to fulfill the RPO, the carry forward/review
should be allowed strictly as per the provisions of the Regulations keeping in view
of availability of REC. In this regard the findings of this Tribunal in Appeal no.
258 of 2013 and 21 of 2014 may be referred to which have been given with regard
to RE Regulations of Gujarat Commission but the principles would apply in rem.
In case of default in fulfilling of RPO by obligated entity, the penal provision as
provided for in the Regulations should be exercised…
(vi) The provisions in Regulations like power to relax and power to remove
difficulty should be exercised judiciously under the exceptional circumstances, as
per law and should not be used routinely to defeat the object and purpose of the
Regulations.”
This is also essentially in line with the earlier APTEL Judgment dated 25 April, 2014
in Appeal No. 24 and IA No. 39 of 2013.
21. As discussed earlier, the Commission notes the justification and the mitigating
circumstances submitted by MSEDCL as cited at para 16 above for its shortfall
against Solar RPO targets. However despite those submissions and facts there under,
the resultant effect is that MSEDCL’s standalone and cumulative shortfall towards
Solar RPO targets as at the end of FY 2016-17 has increased. The Commission
observes that MSEDCL is mandated to fulfill its RPO targets in any case.
Accordingly, the Commission directs MSEDCL as follows with regard to the stand-
alone and cumulative shortfall against its Solar RPO targets in FY 2016-17:

i) MSEDCL shall purchase Solar power and/or RECs (subject to Supreme
Court decision) so as to fully meet its standalone and cumulative shortfall
(as determined earlier in this Order at the end of FY 2016-17), by the end of
March, 2019 instead of March 2020 as requested by MSEDCL.
ii) The performance of MSEDCL in this regard shall be reviewed by the
Commission in future RPO compliance verification proceedings (FY 2017-
18) and also taken into account in the relevant Tariff proceedings.
Other issues
22. As regards suggestion of Dr. Ashok Pendse, Consumer Representative for
verification of Open Access (OA) Consumers and Captive Power Plant (CPP) Users
similar to the RPO compliance verification of Distribution Licensees and Deemed
Distribution Licensees, the Commission by its recent Order dated 4 May, 2018 in
Case No.101 of 2017 has verified the RPO compliance of 683 OA Consumers and
CPP Users for four years starting from FY 2010-11 to FY 2013-14. The Commission
will initiate the next proceedings for three years starting from FY 2014-15 to FY
2016-17 once the consolidated data of OA Consumers and CPP Users is received
from MEDA.
The proceedings in Case No. 207 of 2017 stands concluded accordingly.
Sd/- Sd/- Sd/-
(Mukesh Khullar) ( I. M. Bohari ) (Anand B. Kulkarni)
Member Member Chairperson

Annexure – 1
Summary of RPO compliance by MSEDCL for FY 2016-17, as submitted by MEDA and MSEDCL
(in MUs)
MSEDCL’s RPO
status for FY
2016-17
Gross Energy
Consumption
Solar
RPO
Target
(1%)
Solar
RPO
Achievem
ent
Solar RPO
Shortfall/
(surplus)
Non-
Solar
RPO
Target
(10 %)
Non-Solar
RPO
Achievement
Non-Solar
RPO
Shortfall/(
Surplus)
Mini/Micro
Hydro
target
(0.2%)
within Non-
Solar RPO
Mini/Micro
Hydro RPO
Achievement
Mini/Micro
Hydro
Shortfall/
(Surplus)
As per MEDA 111536.83 1115.36 425.504 689.86 11153.68 9331.693 1821.99 22.307 0.6258 21.681
As per MSEDCL 111536.83 1115.36 425.504 689.86 11153.68 11153.68 0.00 22.307 0.6258 21.681

Annexure -2
A] List of those who submitted written comments/suggestions or made oral submissions
at the Public Hearing
1. Dr. Ashok Pendse, Thane-Belapur Industries Association
B] List of persons at the Public Hearing:
1. Shri. Paresh Bhagawat, MSEDCL
2. Shri. S.S.Rajput, MSEDCL
3. Ms. Rekha Kolhe, MSEDCL
4. Shri. N. P. Jagaldas, BEST
5. Shri. G.M.Bhagat, BEST
6. Shri.S.D. Bamane, BEST
7. Smt. Swati Mehandale, Tata Power Co. Ltd. – Distribution (TPC-D)
8. Shri. Kartik Kadle, TPC-D
9. Shri. Abaji Naralkar, Reliance Infrastructure Ltd. (RInfra-D)
10. Shri. Ankit Patel, RInfra-D
11. Shri.Mayur Wasnik, Indian Railway
12. Smt. Hema Patil, Indian Railway
13. Shri. Nikhil Chauganjkar, Mindspace Business Park Pvt. Ltd.
14. Shri. Nikhil Chauganjkar, Gigaplex Estate Pvt. Ltd.
15. Shri. Manoj Pise, MEDA
16. Shri. Arif H.Shaikh, MEDA
17. Shri. Vijay V. Pawar, MEDA
18. Shri Ashok Pendse, TBIA

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