Verification of compliance of RPO targets by MSEDCL for FY 13-14

A supportive order on RPO has come by MERC wherein penalty on MSEDCL has been triggered but somehow while concluding, the commission underplayed and diluted the essence. It also mentions that MSEDCL may be allowed to recover penalties levied for non-compliance from RE generators (probably for under injection than normative CUF however nothing evidently mentioned on quantum of penalty).

Key highlights:


  • MSEDCL has not fulfilled its Solar, Non-Solar and Mini Hydro RPO cumulatively for past 4 years and not even for FY 2013-14 alone – a total of >2000 MUs shortfall for FY 11 to FY 14

Mini Hydro RPO

  • MSEDCL is directed to meet previous shortfall (33 MUs) plus RPO for FY 15 & FY 16 by FY 16
  • Considering circumstances in Mini Hydro sector, Regulatory Charges / Penalty has not been imposed in respect of shortfall in RPO for FY 14 as done earlier in FY 11, FY 12 and FY 13

Solar RPO

  • Commission did not find any merit in justifications given by MSEDCL for shortfall (cumulative 926 MUs till FY 14) and mentions that REC could have been procured
  • While the Commission has already allowed the cumulative shortfall of earlier years to be met by the end of FY 16 while verification of RPO last year, shortfall in FY 14 cannot be overlooked
  • Hence MSEDCL require to submit details of solar power contracted, being contracted, status of contracted projects etc. while next verification of RPO

Non-Solar RPO

  • Earlier Commission allowed MSEDCL to meet its Non-Solar RPO shortfall of 299 MUs till FY 13 in FY 14 along with RPO for FY 14
  • Cumulative shortfall of 1078 MUs has happened at the end of FY 14
  • MSEDCL contended that, RE generators have not delivered as per the normative CUF otherwise tied up capacity is sufficient to meet RPO till FY 16
  • MERC said that MSEDCL should have procured RECs on finding injection less than expected, as REC mechanism has been specified an alternative for fulfilling RPO targets
  • Giving reference to APTEL judgement on RPO in April 2015 and State’s RPO regulation specific to consequence for RPO non-compliance, MERC found this case to be fit for applying / triggering penalty


  • MSEDCL shall constitute, within a month of this order, a separate ‘RPO Regulatory Charges Fund’
  • Amounts deposited into the Fund shall be determined by MSEDCL accordingly over the remaining period of FY 16
  • Fund shall be utilised by MSEDCL to purchase Solar and Non-Solar RECs and/or to procure power so as to fully meet the shortfall against RPO targets by the end of FY 16
  • MSEDCL shall furnish a statement of the amounts deposited into the Fund and the purchase of RECs and/or actual power therefrom to MEDA every month
  • MEDA shall report the position to the Commission with its comments every month
  • If the REC floor prices are considered, and if only RECs are purchased, a minimum of Rs. 260.33 crore (Rs. 161.72 crore for Non-Solar + Rs. 98.61 crore for Solar) would have to be deposited into the Fund
  • While CERC has fixed the floor and forbearance prices of RECs, actual rate at which they may be available at any given time is not known. Hence, exact amount in terms of figure has not been specified
  • MSEDCL need not deposit into the Fund the entire amount estimated to be required in a lump sum at the outset, but spread it over the remainder of the year depending on its assessment of the REC market and/or actual power procurement
  • MSEDCL has asked that it would not be compelled to procure RECs to fulfil the RPO target since it would burden consumers
  • If a penalty is levied for non-compliance of RPO, MSEDCL may be allowed to recover it from RE generators
  • Expenditure on purchase of RECs and/or actual 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 16

Order-190 of 2014-04082015



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