MERC Orders MSEDCL to Pay ₹11.42 Crore in Delayed Dues to Vena Energy

The Maharashtra Electricity Regulatory Commission (MERC) has directed the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to settle outstanding dues totaling ₹11.42 crore (₹114.2 million) owed to Vena Energy MH Wind Power Pvt. Ltd. (VEMH). The regulatory order, following a petition filed on February 26, 2025, addresses unpaid Late Payment Surcharges (LPS) and associated carrying costs for energy supplied between 2020 and 2024. The total award comprises ₹7.10 crore (₹71.0 million) in primary surcharges and ₹4.31 crore (₹43.1 million) in interest, a measure intended to restore the generator to its rightful economic position.

Portfolio and Project Specifications

The dispute involves wind power assets operated by VEMH, a Special Purpose Vehicle (SPV) under Vena Energy India. The technical and contractual parameters of the projects are as follows:

• Capacity and Location: A 30 MW wind power portfolio situated in the Jath region of the Sangli district, Maharashtra.
• Commercial Operation Date (COD): The projects achieved COD on March 27, 2015, and have been operational for over nine years.
• Project Capitalization: The total project cost is recorded at ₹223.62 crore.
• Power Purchase Agreement (PPA): Energy is supplied to MSEDCL under multiple Wind Energy Purchase Agreements (WEPAs) with a 13-year term from the COD.
• Contracted Tariff: The agreed-upon tariff for the duration of the PPA is ₹5.7/kWh.

Financial Breakdown of Outstanding Dues

The Commission’s ruling provides a specific breakdown of the financial liabilities MSEDCL must discharge. Calculations are based on Article 10.05 (d) of the WEPAs, which mandates a Late Payment Surcharge rate of 1.25% per month—a standard industry rate for agreements of this vintage—for payments delayed beyond the 60-day grace period from the date of invoice receipt.

Legal Arguments and Limitation Period Dispute

The regulatory proceedings centered on a conflict regarding the applicability of the Limitation Act, 1963, to the contested invoices.

Respondent’s Position

MSEDCL contended that a significant portion of Vena Energy’s claims was time-barred. The distribution company argued that under the Limitation Act, monetary claims must be filed within a three-year window. Consequently, MSEDCL asserted that dues pertaining to the period between July 2020 and January 2022 should be excluded, which would have limited their admitted liability to approximately ₹2.07 crore for the period starting February 2022.

Commission’s Reasoning

MERC rejected MSEDCL’s defense, citing the legal precedents established by the Supreme Court of India in response to the COVID-19 pandemic. The Commission noted that the Supreme Court had explicitly ordered the exclusion of the period from March 15, 2020, to February 28, 2022, from the calculation of limitation periods. By applying this extension, MERC determined that Vena Energy’s petition, filed on February 26, 2025, was within the legal timeframe for all contested invoices. Central to the Commission’s reasoning was the principle of restitution, which dictates that the affected party must be restored to the same economic position as if the delay had not occurred.

Final Commission Directives and Implementation

In its final determination, the Commission emphasized the “time value of money” and the necessity of compensating generators for the financial strain caused by withheld legitimate dues. The following directives were issued:

1. Supplementary Invoicing: Vena Energy is required to issue supplementary invoices to MSEDCL reflecting the approved LPS and carrying cost amounts.
2. Settlement Timeline: MSEDCL is directed to clear the total payment of ₹11.42 crore within the specific timelines stipulated in the underlying energy purchase agreements.
3. Regulatory Rationale: The Commission observed that the non-payment of surcharges reduces the effective value of the revenue earned by power generators. Following the restitutive principle, interest on those surcharges is deemed essential to mitigate the economic impact of delayed receivables and ensure the financial viability of renewable projects.

Official Source Citations

1. Appellate Tribunal for Electricity (APTEL)
   • Document: Judgment in Appeal No. 237 of 2023: Adani Power Rajasthan Ltd. vs. Rajasthan Electricity Regulatory Commission & Ors.
   • Date: 18 April 2024
   • Official Portal: aptel.gov.in
2. Ministry of Power, Government of India (via Press Information Bureau)
   • Document: Press Release: Government amends Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 to ensure optimum utilization of available power generating capacity.
   • Date: 01 March 2024
   • Official Release: pib.gov.in/PressReleasePage.aspx?PRID=2010570
3. Maharashtra Electricity Regulatory Commission (MERC)
   • Document: Order in Case No. 47 of 2022: Petition filed by M/s. Enel Wind Project (Amberi) Pvt Ltd. seeking Review of the Order dated 17 August 2021 passed by the Commission in Case No. 27 of 2021.
   • Date: 15 September 2022
   • Official Portal: merc.gov.in