The Maharashtra Electricity Regulatory Commission (MERC) has ruled in favour of M/s Karnataka Resco Rooftop Solar Private Limited (KRRSPL) in a dispute involving Maharashtra State Power Generation Company Limited (MSPGCL) and Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL). The Commission has directed MSPGCL to pay ₹1,11,03,214 to KRRSPL as Deemed Generation Compensation for the financial year 2022-23.
MERC has ordered MSPGCL to release the amount within 30 days. The Commission has also directed MSPGCL to pay a Late Payment Surcharge (LPS) on the outstanding amount from the date it became due until the date of actual payment.
The dispute relates to five solar power projects developed by KRRSPL at Bori, Goregaon, Hatta, Pedgaon and Rani Unchegaon under the Mukhyamantri Saur Krishi Vahini Yojana (MSKVY). KRRSPL had entered into back-to-back Power Purchase Agreements (PPAs) with MSPGCL for the supply of electricity generated from these projects. The electricity was ultimately procured by MSEDCL.
Under the PPAs, KRRSPL was entitled to compensation when grid availability during the specified generation period fell below the guaranteed 98% level. The relevant operational period was from 8:00 AM to 6:00 PM. KRRSPL submitted its claim under Article 4.7 of the PPA after recording instances of lower grid availability.
MSPGCL initially verified KRRSPL’s compensation claim of ₹1,11,03,214 in June 2023. However, MSEDCL subsequently reduced the admissible amount to ₹17,45,089, which was later revised to ₹17,69,702.
MSEDCL had primarily relied on two arguments for reducing the compensation. First, it calculated the total hours of generation in the contract year using a 24-hour daily period based on standard Capacity Utilization Factor (CUF) calculations. Second, it excluded certain interruptions, including over-voltage, under-voltage and scheduled maintenance outages, from the calculation of grid unavailability.
MERC rejected this approach and clarified that the calculation under Article 4.7 must reflect the actual operational window of the solar projects. The Commission held that the total hours of generation should be calculated using the 10-hour period between 8:00 AM and 6:00 PM. According to MERC, applying a 24-hour period would artificially reduce the average generation per hour and undermine the purpose of the compensation mechanism provided under the PPA.
The Commission also held that over-voltage, under-voltage and scheduled maintenance interruptions on the distribution system cannot automatically be excluded while calculating grid unavailability. Such events can be excluded only if MSEDCL establishes that they resulted from an act or default of the generator.
MERC further clarified that MSPGCL’s payment obligation under its direct PPA with KRRSPL is unconditional. MSPGCL cannot delay payment on the ground that MSEDCL has not completed verification or released funds under the separate Power Sale Agreement. MSPGCL, however, can recover the corresponding amount from MSEDCL in accordance with the back-to-back PSA provisions.
With these findings, MERC allowed KRRSPL’s petition and granted the developer full relief, with no order as to costs.
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