Ashish Roy The issue is over cross-subsidy surcharge (CSS) that the Railways need to pay the state government, which according to sources is close to Rs 500 crore. MUMBAI: The Appellate Tribunal for Electricity (ATE) has dismissed the petition of Tata Power Company (TPC) challenging the Maharashtra electricity regulator's order on imposing cross subsidy surcharge from high billing consumers, who have migrated from RInfra to TPC. Representative image (Photo: Bloomberg) States put open access renewable projects at risk by reducing incentives: ICRA 2 min read. 40% Accelerated Depreciation; 10 year Tax holiday on solar projects; Loans available for up to Rs.15 Crore for renewable energy projects under Priority sector lending; 1. Tata Power had challenged the Maharashtra Electricity Regulator Commission's (MERC) order, which allowed Anil … Petition of Maharashtra Electricity Distribution Co. Ltd. for determination of Cross-Subsidy Surcharge for the period from 1.9.2013 to 28.2. Maharashtra, on the other hand, continues to refuse open access permission to its industrial customers . Keeping the current situation in mind, the Commission issued a direction on March 26, 2020, whereby meter reading and physical bill distribution work was suspended, and utilities were asked to issue bills on average usage basis until the current crisis subsides. We believe in free, fair and credible journalism. Commission passed order in the matter of determination of Cross Subsidy Surcharge for FY 2016-17 in terms of the directions of the Hon’ble High Court in W.A. 324 of 2018 . Group captive power plants — based on coal, solar and wind — are operational in large numbers in the states of Karnataka, Haryana, Rajasthan, Maharashtra and Tamil Nadu. 2014 08-Nov-2016 218 KB The Coronavirus pandemic is proving to be the solar industry’s biggest challenge this year, and the repercussions are being felt across industries all over the globe. The trigger is a recent order by the Maharashtra Electricity Regulatory Commission (MERC) to increase CSS from September 1 this year with retrospective effect. MERC’s order is against the very preamble of the Electricity Act, 2003 which demands transparency in the subsidies." Kindly visit the Manage my subscription page to discover the benefits of this programme. Ashish Roy Enjoy Reading! been specifically exempted from levy is cross subsidy surcharge. CSS is a charge levied from the industry when it buys power from open market rather than the state-owned utility MSEDCL. The Commission said that unless fixed costs due to stranded capacity are recovered from open access consumers, this burden would be unjustly passed onto other consumers of a distribution licensee. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. For example, if the average cost of service is Rs 3/unit, the domestic consumer may be charged at Rs 2.5/unit while an industrial consumer may be charged at Rs 3.5/unit. As per the policy, Maharashtra Electricity Regulatory Commission (MERC) will declare separate open access (OA) regulations and cross subsidy surcharge (CSS) for renewable energy. Rajasthan Electricity Regulatory Commission (RERC) has calculated the Cross subsidy surcharge to be applicable during FY 16-17. The Commission added that it would be unfair and unwarranted to pass such a burden of fixed cost recovery of stranded cost to other consumers through consequent tariff hike. Business Standard is happy to inform you of the launch of "Business Standard Premium Services". FINANCIAL ASSISTANCE. MP Proposes High Cross Subsidy Surcharge After Maharashtra, it was the turn of MP to propose a high cross-subsidy surcharge. Cross Subsidy Surcharge & Additional Surcharge order for FY 2018-19 Dated:27.03.2018 Retail supply tariff 2016-17 Dated:23.06.2016 Cross Subsidy Surcharge Order FY 2016-17 All renewable energy projects other than small hydro and municipal solid waste will be governed by the deviation settlement mechanism. Support quality journalism and subscribe to Business Standard. On the other hand, R B Goenka, chairman of Vidarbha Industries Association's (VIA) Energy Cell, said there won't be any competition in the power sector and the consumers drawing power from the state-run Maharashtra State Electricity Distribution Company will have no other option to purchase power from it despite high tariff. The concept was evolved by industries to avoid cross-subsidy charges levied on inter-state electricity sale. "If the MERC order to increase CSS (cross subsidy surcharge) is not stayed, the appellants (Tata Power and others) will have to pay surcharge which is increased by four to ten times for commercial consumers … The Appellate Tribunal for Electricity has stayed the Maharashtra electricity While Maharashtra struggles to meet its retail customers' power requirements, it continues to refuse permission to industries willing to purchase power from the open markets. CSS Cross Subsidy Surcharge CTPS Chandrapur Thermal Power Station CWIP Capital Works in Progress DA Dearness Allowance Discom Distribution Company DSM Demand Side Management DTPS Durgapur Thermal Power Station DTR Distribution Transformer DVC Damodar Valley Corporation EA 2003 Electricity Act, 2003 EHT Extra High Tension As a premium subscriber you get an across device unfettered access to a range of services which include: Welcome to the premium services of Business Standard brought to you courtesy FIS. Maharashtra Govt rolls out incentives for renewable energy. Initially, the Commission has determined the Cross Subsidy Surcharge for MSEDCL as ZERO vide its Order dated 05.09.2006 and continued to determine it to be ZERO during all its subsequent tariff orders. As a result, the generation capacity tied up by MSEDCL remains idle. NAGPUR: In a major relief to solar rooftop consumers, Maharashtra Electricity Regulatory Commission (MERC) has rejected the proposal of Maharashtra St. Posted on May 26, 2015 by Ritesh Pothan. Maharashtra Open Access Consumers to Pay Additional Surcharge of ₹1.31/kWh for FY 2021. The Maharashtra Electricity Regulatory Commission (MERC) earlier this month passed an order asking the Railways to pay CSS. If MSEDCL does not grant OA within time stipulated by MERC, the promoter will get deemed OA. This has left the industries miffed. Industries in Maharashtra will have to shell out more to avail open access due to a rise in cross-subsidy surcharge (CSS). Vs. Maharashtra Electricity A.No.252 of 2014 Page 9 of 18 SH Regulatory Commission dated 17.03.2015 in Appeal No.27 of 2015, the same issue is again sought to be raised by the appellant to prejudice consumption of electricity by captive users and impose cross subsidy surcharge which cannot be permitted. MUMBAI: The Appellate Tribunal for Electricity today stayed a MERC order increasing cross subsidy surcharge payable by Tata Power customers migrating from Reliance Infra's network. Tax benefits Under this structure, a corporate buyer who holds the asset on its balance sheet is also eligible to claim tax benefits through accelerated depreciation. Group captive power plants — based on coal, solar and wind — are operational in large numbers in the states of Karnataka, Haryana, Rajasthan, Maharashtra and Tamil Nadu. Cross subsidization is the practice of charging higher prices to one type of consumers to artificially lower prices for another group.State trading enterprises with monopoly control over marketing agricultural exports are sometimes alleged to cross subsidize, but lack of transparency in their operations makes it difficult, if not impossible, to determine if that is the case. As per the order, the consumers will be charged ₹14,500 (~$191.67) as the processing fee for up to 1MW, ₹22,000 (~$290.81) for more than 1 MW and up to 5 MW, ₹44,000 (~$581.63) for more than 5 MW and up to 20 MW, and ₹75,000 (~$991.41)  for more than 20 MW and up to 50 MW and above. © 2021 by Mercom Capital Group, LLC. Sanjay Jog  |  In case of supply of power to a consumer or to a person other than its members, such consumer or person will have to pay cross-subsidy surcharge over and above transmission and wheeling charges as determined by the UPERC. The amount of surcharge shall be paid to the distribution licensee of the area of supply from whom the consumer was availing supply before seeking open access. Tata Power consumers in Mumbai who had shifted to its distribution network from Reliance Infra have got temporary relief. This has left the industries miffed. Cross subsidy surcharge is normally computed as the difference between (i) the tariff applicable to the relevant category of consumers and (ii) the cost of the distribution licensee to supply electricity to the consumers of the applicable class i.e., Cost of Service (CoS) for a particular category of consumers. 836 KB . In fact, reduction of cross-subsidy or tariff rationalisation has been the major factor of tariff reforms and it is for this reason that the independent regulatory commissions were envisaged through Electricity Regulatory Commissions Act, 1998. Case of Bhadreshwar Vidyut Private Limited against wrongful imposition of Cross Subsidy Surcharge (CSS) and Additional Surcharge by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) on the captive users of M/s Bhadreshwar Vidyut … The cross-subsidy surcharge should be brought down progressively and, as far as possible, at a linear rate to a maximum of 20% of its opening level. Maharashtra State Electricity Distribution Company Limited (MSEDCL) has said that consumers are buying a considerable amount of power under open access, and on the other hand, it has tied up a sufficient amount of power to meet the expected demand by considering the overall growth in the state. Industry bodies argue open access will become an unviable proposition because, apart from higher CSS, they will have to pay charges towards transmission and distribution losses, wheeling charges and administrative charges. Open Access charges from the grid are applicable, but unpredictable charges, such as cross-subsidy surcharge and additional surcharge, are waived in captive and group captive projects. In this case, it is said that the domestic consumers are cross-subsidized by industrial consumers. "In our view, the CSS is unrealistic and misplaced. It further said that for the fourth control period, an additional surcharge would apply to captive users of group captive power projects, in addition to open access consumers. Of late, Maharashtra, Rajasthan, Tamil Nadu and Andhra Pradesh among others are witnessing a new trend wherein a group of associations or consumers would form group captive power projects. the Cross Subsidy Surcharge (CSS) and Additional Surcharge applicable to an Open Access consumer, from an entity which claims to be a Captive or Group Captive Power Plant (CPP/ GCPP) before grant of Open Access. The Commission has approved the Additional Surcharge of Rs.1.25 per unit to be applicable with effect from 1st September 2018. The Maharashtra Electricity Regulatory Commission (MERC) has announced various charges payable by open access consumers for the financial year 2020-21 to 2024-25. Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. According to S L Patil, advisor, Thane Belapur Industries Association, industries will not be able to avail cheap power from various sources in the country. However, in this case, MERC has not given the roadmap for the same. Cross Subsidy Surcharge & Additional Surcharge order for FY 2018-19 Dated:27.03.2018 Retail supply tariff 2016-17 Dated:23.06.2016 Cross Subsidy Surcharge Order FY 2016-17 CSS Cross Subsidy Surcharge CTPS Chandrapur Thermal Power Station CWIP Capital Works in Progress DA Dearness Allowance Discom Distribution Company DSM Demand Side Management DTPS Durgapur Thermal Power Station DTR Distribution Transformer DVC Damodar Valley Corporation EA 2003 Electricity Act, 2003 EHT Extra High Tension ER Eastern Region FCA Fuel Charge Adjustment FY … According to an approach paper released on the topic by MPERC, industrial consumers will have to pay upto Rs 1.53 per unit as cross-subsidy. According to Goenka, VIA will soon approach the Appellate Tribunal for Electricity challenging the MERC's order. Digital Editor. Tax benefits Under this structure, a corporate buyer who holds the asset on its balance sheet is also eligible to claim tax benefits through accelerated depreciation. A fight between the Indian Railways and the state electricity body that is taking an ugly turn. Project wise Statutory fees, testing fees, supervision charges, application fees etc. Maharashtra : MERC Order on cross subsidy surcharge: Program Overview: State: Maharashtra : Technology : Bagasse/Biomass Biofuel Municipal Solid Waste Non-Fossil Fuel Based Cogeneration Small Hydro Power Small Solar Solar Power Project Solar PV Solar Thermal Wind : Date of Issue : … Maharashtra Govt rolls out incentives for renewable energy. Industries in Maharashtra will have to shell out more to avail open access due to a rise in cross-subsidy surcharge (CSS). MSEDCL’s prayers are as follows:- i. Mumbai  This will amount to more than Rs 3.60 per unit over and above the purchase of power through open access.document.write("");googletag.cmd.push(function(){googletag.defineOutOfPageSlot('/6516239/outofpage_1x1_desktop','div-gpt-ad-1490771277198-0').addService(googletag.pubads());googletag.pubads().enableSyncRendering();googletag.enableServices();}); For extra high voltage (EHV) express feeder consumers, CSS in open access has increased from Rs 1.63 a unit to Rs 2.75 a unit; for EHV non-express feeder consumers, it has risen from Rs 1.20 a unit to Rs 2.26 a unit. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). Mumbai: The Appellate Tribunal for Electricity (ATE) on Monday upheld the Maharashtra Electricity Regulatory Commission’s (MERC) order levying a cross-subsidy surcharge on … All renewable energy generating projects will be subject to a day ahead scheduling. Both the provisions i.e., Section 42 (2) and 42 (4) of the Act are independent provisions and they have no relevance whatsoever between the two. In what may be a gain for farmers, but a loss for the manufacturing sector, Maharashtra Electricity Regulatory Commission (MERC) has approved a hike in cross subsidy surcharge (CSS) from Rs 1.18-1.60 per unit to Rs 2.30-2.75 a unit respectively. yrds in scheme no. Earlier, the Maha Solar Sangathan, raising concerns over the proposed grid support charges, had requested the MERC to ask the state DISCOM to explain that when the total handling cost of electricity is ₹0.70 (~$0.01)/kWh, why has it proposed a hefty grid support charge to the tune of  ₹8.66 (~$0.12)/kWh. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. surcharge on group captive power plant. 5 Sep 2012 … The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in …. “Allow … The cross-subsidy surcharge should be brought down progressively and, as far as possible, at a linear rate to a maximum of 20% of its opening level. Then the Commission vide order dated 09th September 2011 (Case No. More articles from Rakesh Ranjan. NAGPUR: In a major relief to solar rooftop consumers, Maharashtra Electricity Regulatory Commission (MERC) has rejected the proposal of Maharashtra St. On 18 August 2014, the Karnataka Electricity Regulatory Commission (KERC) passed order number S/03/01 called ‘Wheeling Charges, Banking Charges & Cross Subsidy Surcharge for Solar Power Generators’, whereby all solar power generators in the state who achieved Commercial Operation Date (COD) before 31 March 2018 were exempted from payment of wheeling and banking charges and cross subsidy … As per the policy, Maharashtra Electricity Regulatory Commission (MERC) will declare separate open access (OA) regulations and cross subsidy surcharge (CSS) for renewable energy. ATE dismisses Tata Power's plea over cross subsidy surcharge 25 Dec, 2012, 11.30 PM IST Under the cross-subsidisation regime, consumers with higher power usage compensate for lower costs per unit charged from those consuming less than 300 units a month. Rakesh is a staff reporter at Mercom India. In case the consumer tariff is more than 120% of Average Cost of Supply, DISCOM will not be able to recover losses through cross subsidy surcharge in case consumer opts for … What is cross subsidy? Cross subsidy surcharge determined on Per Unit basis shall be payable, on monthly basis, by the open access customers based on the actual energy drawn during the month through open access. The issue is over cross-subsidy surcharge (CSS) that the Railways need to pay the state government, which according to sources is close to Rs 500 crore. Regarding the wheeling charges, the Maharashtra State Electricity Distribution Company Limited (MSEDCL) in its submission had stated that for the control period from FY 2020-21 to 2024-25, it had proposed wheeling charges for three levels only, extra-high voltage (66 kV and above), high tension (combined wheeling charges for 33, 22, and 11 kV) and low tension level. The only charge which has been specifically exempted from levy is cross subsidy surcharge. The State is in a soup, thanks to its own decision of zero cross-subsidy surcharge. The Gazette of India EXTRAORDINARY PART I - Section 1 PUBLISHED BY AUTHORITY Ministry of Power New Delhi, Dated the 6th January, 2006 RESOLUTION No.23/2/2005-R&R(Vol.III) Posted in CERC, Cross Subsidy Surcharge, DISCOM, India, Maharashtra, MERC, MSEDCL, Transmission Charges | Tagged Cross Subsidy Surcharge, CSS, Solar, Thermal, Wind | Leave a comment. If the energy is supplied to a distribution licensee, no cross-subsidy surcharge will be payable. The statute has to be interpreted from the words appearing in the statute Last Updated at November 19, 2013 02:21 IST. …. The statute has to be interpreted from the words appearing in the statute and there cannot be addition of meaning to the words. Industries in Maharashtra will have to shell out more to avail open access due to a rise in cross-subsidy surcharge (CSS). 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