Maharashtra Raises Banking Fees under New Open Access Rules

16 Nov 2023 CW Team

Under the revised regulations, effective from April 1, 2022, electricity consumers in Maharashtra seeking open access will have to pay a higher fee for banking power. Banking power refers to the system where surplus electricity generated by a consumer can be injected into the grid and withdrawn later as per requirements.

Previously, Maharashtra had imposed a banking fee of INR 0.05 ($0.0007) per unit on surplus electricity. However, the revision increases the banking fee to INR 0.45 ($0.006) per unit, marking a substantial rise. The higher fees are expected to ensure the financial sustainability of the DISCOMs while promoting renewable energy generation.

The move comes as a result of DISCOMs' concerns that the lower banking fees were causing an increase in the cost of power for non-open access consumers. DISCOMs argued that open access consumers were enjoying significant benefits due to the current minimal banking fees. By increasing the fees, the state intends to strike a balance and alleviate the financial stress on DISCOMs.

Moreover, the MERC has also addressed the concerns of small-scale consumers by allowing them to fully offset their total energy consumption against generation from renewable energy sources. This provision aims to encourage smaller consumers to adopt renewable energy solutions and contribute to the state's clean energy goals.

The revised open access regulations align with the state's commitment to renewable energy growth and the reduction of carbon emissions. Maharashtra has set a target to achieve 40% of its electricity generation from renewable energy sources by 2030. The state is already one of the leaders in India's clean energy transition, with significant investments in solar and wind power projects.

While the higher banking fees may pose challenges for renewable energy generators, it is hoped that the revised regulations will create a more balanced and sustainable framework for open access in Maharashtra. The state aims to strike a balance between promoting renewable energy and ensuring the financial viability of the DISCOMs, enabling a greener and more resilient electricity sector.

The Maharashtra Electricity Regulatory Commission (MERC) has revised its open access regulations, introducing higher banking fees for renewable energy projects in the state. The move aims to address concerns raised by electricity distribution companies (DISCOMs) about the financial burden caused by banking provisions. Under the revised regulations, effective from April 1, 2022, electricity consumers in Maharashtra seeking open access will have to pay a higher fee for banking power. Banking power refers to the system where surplus electricity generated by a consumer can be injected into the grid and withdrawn later as per requirements. Previously, Maharashtra had imposed a banking fee of INR 0.05 ($0.0007) per unit on surplus electricity. However, the revision increases the banking fee to INR 0.45 ($0.006) per unit, marking a substantial rise. The higher fees are expected to ensure the financial sustainability of the DISCOMs while promoting renewable energy generation. The move comes as a result of DISCOMs' concerns that the lower banking fees were causing an increase in the cost of power for non-open access consumers. DISCOMs argued that open access consumers were enjoying significant benefits due to the current minimal banking fees. By increasing the fees, the state intends to strike a balance and alleviate the financial stress on DISCOMs. Moreover, the MERC has also addressed the concerns of small-scale consumers by allowing them to fully offset their total energy consumption against generation from renewable energy sources. This provision aims to encourage smaller consumers to adopt renewable energy solutions and contribute to the state's clean energy goals. The revised open access regulations align with the state's commitment to renewable energy growth and the reduction of carbon emissions. Maharashtra has set a target to achieve 40% of its electricity generation from renewable energy sources by 2030. The state is already one of the leaders in India's clean energy transition, with significant investments in solar and wind power projects. While the higher banking fees may pose challenges for renewable energy generators, it is hoped that the revised regulations will create a more balanced and sustainable framework for open access in Maharashtra. The state aims to strike a balance between promoting renewable energy and ensuring the financial viability of the DISCOMs, enabling a greener and more resilient electricity sector.