Case No. 160 of In the matter of

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: / www. merc.gov.in Case No. 160 of 2017 In the matter of Petition of Bharat Electronics Limited under MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015 for the implementation of 3 MW of Grid Connected solar power project at Ordinance Ammunition Factory, Khadki (AFK), Pune with the facility of Net Metering. Coram Shri. Anand B. Kulkarni, Chairperson Shri Mukesh Khullar, Member Bharat Electronics Ltd (BEL)... Petitioner V/s Maharashtra State Electricity Distribution Company Limited (MSEDCL). Respondents Appearance For the Petitioner : Shri. Hem Raj Satija (Rep.) For MSEDCL : Shri. Ashish Singh (Adv.) ORDER Date: 15 June, Bharat Electronics Limited (BEL), (A Govt. of India Enterprise, Ministry of Defence), Jalahalli Post, Banglaore , has filed a Petition on 10 November, 2017 under Section 86(1)(e) of the EA, 2003 for seeking clearance under Clause 13'Power to Relax', for the implementation of 3 MW of Grid Connected solar power project at Ordinance Ammunition Factory, Khadki (AFK), Pune with the facility of Net Metering under MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015 (Net Metering Regulations, 2015). Order in Case No 160 of 2017 Page 1

2 2. BEL s prayers are as follows: a) The electricity supply connection of the Ammunition Factory Khadki (AFK), Pune, is from dedicated transmission system from 220/ 22kV/ 11 kv Substation, which is within its premises, and the installation of net metered bi-directional metered solar systems on consumer premises will utilize the same service line and installation which is currently being used by the consumer for drawal of power from utility network, for injection of excess power into the Grid. The average consumption of the AFK is much higher than 3 MW. Hence MSEDCL, Pune is not likely to face technical and operational difficulties in the implementation of this project. b) Ministry of Defence is committed to the cause of Jawahar Lal Nehru National Solar Mission, JLNSM and has offered to develop 300 MW of Solar Power Plants on its land in Ordnance Factories and other places. c) For economic viability of captive solar power plants, where generation during peak hours is miniscule, the preferred mode of grid connectivity and commercial arrangement with DISCOM is by way of Net-metering as explained in para 14 above please. The imposition of CSS, Additional Surcharge, Wheeling Charges, Banking charges and limit on the banked energy in case of Solar Power Captive Power Plants and other misc fees and charges, is discouraging the endeavor of the Ministry of Defence units for the development of Solar Power Plants. 3. BEL in its Petition has stated as follows: 1) Ministry of New & Renewable Energy (MNRE) for achieving the targets stated in the Jawaharlal Nehru National Solar Mission, issued a notification vide Office Memorandum No.30/69/ /NSM (Pt), Dated 07 January, 2015 for implementation of Defense scheme for setting up of over 300 MW of Grid connected & Off-grid Solar PV Power projects from 2014 to 2019, with Viability Gap Funding (VGF) under Phase II/III of NSM, by the Defence Establishments under the aegis of Ministry of Defence (MoD/ GoI). 2) For the time bound implementation of the aforesaid Defense scheme, MoD approved the proposal vide letter dated 7 March, 2016 for setting up 150 MW grid connected Solar Power Plants on the lands provided by Ordnance Factories (under Ordnance Factory Board (OFB)/ GoI), through BEL, a Defense PSU under MoD, Govt of India, on nomination basis. 3) BEL is a multi-products, multi-technology, multi-unit conglomerate with over 350 products in the areas of Military Communication, Radars, Naval Systems, C4I Systems, Weapon Systems, Homeland Security, telecom & Broadcast Systems, Electronic Warfare, Tank Electronics, Electro Optics, Professional Electronic Components and Solar Photovoltaic Systems. BEL foresaw the potential and Order in Case No 160 of 2017 Page 2

3 importance of Renewable Energy in India and forayed into the business of Solar Photovoltaic during the years BEL has state of the art 10 MW Monocrystalline Solar Cells and Modules manufacturing facility at Bangalore. 4) The Ammunition Factory Khadki, Pune, Maharashtra (AFK), one of the 41 Ordnance Factories across the country, has been identified under the Defense scheme, for setting up of grid interactive 3 MW PV Solar Power Plant. 5) The Ordnance Factory Board (OFB) having full control of the management of Ordnance Factories, has authorized BEL for the development of the Solar Power Plant in the premises of AFK, Pune vide its letter dated 7 March, AFK, Pune, has also authorized BEL Bangalore to setup Solar Power Plant on the allocated land within its premise, vide letter No. 2702/ Solar Power Plant 3 MW/ EO (P&M) dated 19 September, Facts of the Case: 6) AFK, Pune is HT Connection Consumer (SC. No ) of MSEDCL and the proposed 3 MW Solar Power Plant is planned to be installed in an allocated area of 14.4 Acres of land within the premises of the AFK. The power generated from the solar power plant shall cater to the captive energy needs of AFK. 7) The sanctioned contract demand of AFK, Pune is 5 MVA and getting supply from MSEDCL through two dedicated express feeders of 11 KV each from the 220 kv /22KV/11 kv, MSTCL Substation (Named as MSEB-512), which is within the premises of AFK. The annual average consumption of electricity in AFK, Pune is 14.8 MUs against estimated annual generation of 4.8 MUs from proposed 3 MW Solar Power Plant. 8) Though the average and maximum load of AFK, Pune is much higher than the generation from the captive Solar Power Plant, but during off-days, but for some sporadic instances the load may go below 3 MW of generation and it is only in this condition, the excess generation from Solar Plant shall be fed to the grid. It is estimated that about 16% of total energy generated over the year may flow to grid (i.e. about 0.8 MUs out of total estimated annual generation of 4.8 MUs 9) In order to facilitate grid interactive Solar Power Plant, the Commission as per the powers of the Commission enshrined under clause 86 (1) (e) of the Electricity Act, 2003 and for the financial viability of the grid connected Solar Power Plant, has made following regulatory provisions:- a) Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, b) Maharashtra Electricity Regulatory Commission (Distribution Open Access) Regulations, Order in Case No 160 of 2017 Page 3

4 c) Maharashtra Electricity Regulatory Commission (Transmission Open Access) Regulations, ) Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015, caters only up-to the capacity of 1 MW. For the present 3 MW Captive Solar Power Plant, the only choice left for grid connectivity of more than 1 MW Solar captive power plant, is by way of applying for open access under the provisions of the Maharashtra Electricity Regulatory Commission (Distribution Open Access) Regulations, 2016 and avail banking facility for Solar Power generation. However, while drawing power under Open Access / Banking facility, the consumer is required to pay additional charges and other financial implications, having negative impact on the generation tariff and viability of the project, which are indicated as under:- a) On withdrawal of banked energy, the consumer is required to pay following charges:- Wheeling Charges; Cross-Subsidy Surcharge; Additional Surcharge on the charges for wheeling; MSLDC fees and charges. b) Withdrawal of banked Solar power is permissible only during off-peak hours. Credit for banked energy is not permitted during the months of April, May, October and November, and the credit for energy banked in other months shall be as per the energy injected in the respective Time of Day ( TOD ) slots. c) The unutilized banked energy at the end of the financial year is limited only to 10% of the actual total generation by such Renewable Energy generator in such financial year, d) Banking Charges is 2% of the energy. e) Processing fee by MSEDCL i.e. Rs. 1 lakh whereas connectivity is within the sanctioned load as per the existing design of the grid infrastructure. f) Registration Fee with MEDA Rs Lakh (Rs. 50,000 per MW) 11) Thus, for the viability of the project, a Petition is filed to seek relaxation for executing the aforesaid 3 MW Solar Power Project under the provisions of Maharashtra Electricity Regulatory Commission (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, Ground in support of the case: 12) The aforesaid Scheme of MNRE/ GoI mandates Bharat Electronics Limited (BEL), Bangalore, for complying with the Domestic Content Requirement (DCR) Order in Case No 160 of 2017 Page 4

5 while deploying both domestic cells and PV Modules for the Solar Power Projects being executed by BEL. 13) The Ordnance Factories including AFK, Pune works under the control of Ordnance Factory Board under the aegis of Ministry of Defence (MoD) and the power produced from the proposed Solar power plant is for Captive consumption of the Ordnance Factory only. 14) BEL as developer and operator of the plant shall supply generated power from the Solar plant to the AFK at a fixed tariff of Rs per unit for 25 years from the date of commissioning of the plant. Due to off-work days of factory in a year, it is estimated that about 16% of the energy generated over the year i.e. about 0.8 MUs of the generated 4.8 MUs shall be required to be banked. While drawing back the Banked Energy and due to the impact of the aforesaid financial implications, the tariff for the supply of power reduces from Rs per unit to Rs per unit. If out of the total banked energy of 16%, the permissible limit of 10% is surrendered and considered sale to the DISCOM at APPC (Rs per unit) as per the regulatory provisions and balance 6% is drawn from the banked energy, the tariff for the overall supply of 4.8 MUs over the year is reduced to Rs per unit. 15) Solar Energy being Natural and Clean Renewable energy resource, it is need of the hour to utilize it upto its full potential. MoD is fully committed to the cause of Jawaharlal Nehru National Solar Mission (JNNSM) as per the guidelines of MNRE/ Govt. of India. 16) The Ordnance factories possess vast pockets of vacant land and also consume large amount of power for their operations. Hence, there exists considerable potential for installing solar power systems which can be harnessed to meet local in-house demand. This doorstep injection of local generation would further help in reducing line losses of the distribution licensee. Further the injection into grid of surplus power shall reduce the overall Pooled Cost of Power Purchase for that year including new projects of energy. Other References: 17) Odisha Electricity Regulatory Commission vide order No. OERC-Engg. 02/2010/ (Vol-IV)/1131 dated 19 August, 2016, under para 1.(vi.), in order to facilitate captive power plants on RE, and to encourage consumer participation towards renewable energy, has passed the order that There is no cap on the capacity of solar installation at a particular consumer level as long as it is within the limit of the connected load / 75% of transformer capacity. The earlier restriction of 1 MW solar capacity at a single location is removed. 18) Also Uttar Pradesh Electricity Regulatory Commission, after considering the petitions filed by the Petitioner/ Ordnance Factories for the Solar Projects under the Scheme, has given approval for 5 MW at Kanpur (Ref. UPERC Order in Petition No. Order in Case No 160 of 2017 Page 5

6 1202 of 2017dated 16 August, 2017) and 2 MW at Muradnagar (Ref. UPERC Order in Petition No of 2017dated ) for net-metering provisions. 19) In the larger interest of the state and the environment, the Commission is requested to kindly give its clearance under the Clause 13 Power to Relax of the regulations, for the implementation of the instant 3 MW of Grid Connected solar power project in the premises of the AFK, Pune under the developer mode along with the facility of Net Metering please. 4. MSEDCL in its submission dated 28 December, 2017 has stated that; 1) AFK, Pune is an existing consumer of MSEDCL. BEL has been selected as Project Developer/ Holder for installation of 3 MW Solar power project in the premises of AFK under the JNNSM Phase-II VGF scheme for setting up of 300 MW Grid-connected and Off-Grid Solar Power projects by Defence Establishments. The solar power generated by 3 MW Solar project of BEL will be supplied to AFK at Rs.4.50 p.u. for 25 years. After the consumption by AFK, the remaining energy will be supplied to Grid. Eligibility under Net Metering Regulations: 2) The Commission has specified the definition of eligible consumer under Regulation 2.1(g) as below: 2.1(g) Eligible Consumer means a consumer of electricity in the area of supply of the Distribution Licensee who uses or intends to use a Solar Photo Voltaic ( PV ) generating System having a capacity less than 1 MW, installed on a roof-top or any other mounting structure in his premises, to meet all or part of his own electricity requirement, and includes a Consumer catering to a common load such as a Housing Society: Provided that such generating System may be owned and/or operated by such Consumer, or by a third party leasing such System to the Consumer. 3) MERC (Net Metering for Roof-Top Solar Photo Voltaic Systems) Regulations, 2015 makes it applicable to a consumer of Distribution licensee who intends to use a Rooftop Solar Photovoltaic generating system having a capacity less than 1 MW. 4) Thus, BEL is not entitled for net metering as per the existing legal provisions but be treated as IPP/RE generator. 5) Moreover, BEL which is a third party entity installing and owning the Solar plant and selling power to AFK through a supply agreement at rate 4.50/- p.u for 25 Order in Case No 160 of 2017 Page 6

7 years which is clear third party sale. The supply/wheeling of power generated through the said Solar power plant established by BEL to AFK will be under the purview of Open Access Regulations only. Hence will attract CSS and other applicable Open Access charges and losses as per provisions in the Electricity Act 2003 & present MERC (Distribution Open Access) Regulations, Grid Connectivity: 6) The generating stations can apply for the Grid connectivity to Distribution System as per the Regulation 5 of MERC (Distribution Open Access) Regulations, Similarly, Imbalance charge, Reactive energy charge, banking to Renewable Energy & commercial matters in relation to open access are governed by MERC (Distribution Open Access) Regulations, Wheeling of Solar energy from the 3 MW Solar power Project of BEL up-to the destination of use will squarely fall under the purview of MERC (Distribution Open Access) Regulations, The generator shall be connected to MSEDCL s grid and not to internal bus of consumer. 7) Therefore, BEL can apply for and avail of various regulatory provisions of Distribution Open Access so as to serve its purpose. Hence, the demand seeking amendment in Net Metering Regulations, for which BEL is not at all eligible, is without any locus and justification. 8) As per the present Regulatory framework, the proposal of BEL is not a fit case due to the eligibility criteria below 1 MW specified in the Net Metering Regulations, However, relaxing the condition for any consumer per se, would lead to making Exception to Rule of Law and this would create undue precedence as well as unjust enrichment, whereby various other potential consumers would approach MSEDCL seeking this benefit, which may not be a healthy situation. Further, such situation will have commercial implications on MSEDCL. In view of the above, the demands of BEL are not tenable and the petition is liable to be dismissed. 5. BEL in its submission dated 5 January, 2018(filed on 8 January, 2018) has stated that; 1) The present 3 MW Solar Power Plant in the premises of Ordnance Ammunition Factory Khadki (AFK), Pune is being executed by the Ministry of Defence (GoI) through the Defence Company, BEL, Bangalore. Both these organizations i.e. Ordnance Ammunition Factory Khadki (AFK), Pune and BEL, Bangalore are working under the Department of Defence Production (DDP), MoD, New Delhi. 2) The project has been taken up as per the MNRE Defence Scheme for development of total of 300 MW Grid Connected Solar Power plants by the Ministry of Defence on vast pockets of Land available and also keeping in view the total targets of 100 GW (100,000 MW) to be developed under National Solar Mission of Govt. of India. Order in Case No 160 of 2017 Page 7

8 3) The project is being executed exclusively for the Captive use of the Ordnance Factory through funds of the Ministry of Defence and is fully compliant to the conditions of Section 9- Captive generation of the EA, There is no sale of power to third party. 4) The Net Metering facility has been sought for in this project of 3 MW on merits of the case as under:- i. The Project of 3 MW is within the premises of the Ordnance Factory, where the sanctioned load is 5 MVA ( 5MW). ii. The Load of 5 MVA is being fed through two 11 KV Express Feeders emanating from the 220 kv/22 kv/11 kv Substation (named as MSEB-512, within the premises of the consumer) and terminating in the factory premises of the consumer at 11 kv Bus. iii. In the present case, Open Access grid connectivity is not called for by incurring unnecessarily expenditure on grid connectivity through open access and increasing line losses. In the Grid Connectivity feasibility report, MSEDCL has conveyed that a new substation of 22 kv/11 kv shall have to be constructed. The cost of construction of New Substation on the Land to be provided by the Consumer would be about Rs. 10 Crore on the estimated cost of the project of Rs. 15 Crore. iv. In the Forum of Regulators Working Group Report on Evolving Netmetering Model Regulation for rooftop based solar PV projects, the following excerpts may kindly be re-visited a) In a net-metering arrangement, the focus is primarily on selfconsumption of electricity generation by the consumer. The excess/surplus is either sold to or banked with the local utility. Net metering arrangements, thus, combine elements of captive consumption and exchange of power with the utility. b) In respect of Energy Accounting, Commercial and Technical Arrangements, the capacity of an individual rooftop PV systems under net metering concept is subject to various parameters such as available capacity of the service line connection of the consumer, the connected load of the consumer and the cost implications of utility system augmentation (if required). c) The installation of net metered rooftop solar systems on consumer premises will utilize the same service line for excess power injection into the grid, which is currently being used by consumer for drawl of power from utility network. Thus, the capacity limits for installation of netmetering based rooftop solar systems has to address the following two requirements: a) the individual capacity limit for system that can be installed on a particular consumer premises b) the maximum (higher limit) capacity allowed to be installed under a net-metering arrangement. d) In addition, the issue concerning the implication of cost for infrastructure up-gradation at distribution level, if required on account of installation of higher capacity system than that permitted by the existing service line needs to be addressed. Order in Case No 160 of 2017 Page 8

9 e) International case studies on the capacity limits prescribed by the utilities shows a wide variation depending on technology, the customer type and application. In the United States, the net-metering concept in a number of provinces like California, Colorado, Florida, New Jersey etc includes other technologies (solar thermal electric, wind, biomass, hydroelectric, geothermal electric) apart from rooftop solar PV. Hence some of these provinces have higher limits allowed for net-metering going upto 10 MW. The capacity limits also depend internationally on the type of customer. For example, v. To encourage consumer participation towards RE the Uttar Pradesh Electricity Regulatory Commission(UPERC) has given relaxation upto 5 MW for Net-metering facility to rooftop Solar Power Plants and in this direction, the Orissa Regulatory Commission has removed the Gap in the capacity of Solar installation at consumer level. As long as it is within the limit connected load / 75% of transformer capacity and has removed the earlier restriction of 1 MW Solar Capacity at a single location. vi. In the present scenario when there is scarcity of Land and limited rooftop available, it is submitted for the consideration of the Commission to encourage the installation in the premises of the consumer through Netmetering facility and to avoid pay for the transmission loss, wheeling charges, banking charges and other miscellaneous fees and charges which are discouraging the endeavor of the consumers for installation for Solar Power Plants in their premises. vii. The objections raised by MSEDCL does not seem to be rational as it has not clearly laid down the negative impact of relaxation in the capacity limit to this project of 3 MW on the merits of the case as explained above please. 5) It is therefore, prayed in the larger interest of the State and the environment that the Commission to kindly give its clearance under clause 13 power to relax the Net Metering Regulations, 2015, for implementation of the instant 3 MW of Grid Connected Solar power Project in the premises of the Ammunition Factory, Khadki (AFK), Pune with the facility of Net Metering on merits of the case. 6. The proceedings of the hearing held on 8 January, 2018 are summarized as follows: 1) The Representative of Bharat Electronics Ltd (BEL) stated that: a) BEL has been selected as Project Developer/ Holder for installation of 3 MW Solar power project in the premises of Ammunition Factory Khadki (AFK), Pune identified under the Defense Scheme. b) AFK Pune is consumer of MSEDCL and the sanctioned contract demand is 5 MVA. The proposed 3 MW Solar Power Project is to be installed in an allocated area Order in Case No 160 of 2017 Page 9

10 of 14.4 Acres of land within the premises of the AFK. The Solar power generated by 3 MW Solar project of BEL will be supplied to AFK at Rs.4.50 per unit. for 25 years. c) The annual average consumption of AFK is 14.8 MUs and estimated annual generation of 4.8 MUs from proposed 3 MW Solar Power Plant. Considering holidays and some sporadic instances load may go below 3 MW and about 16% (i.e. about 0.8 MUs out of total estimated annual generation of 4.8 MUs) of total energy generated over the year may flow to grid. d) BEL is seeking relaxation for executing 3 MW Solar Power Project under the provisions of MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, ) Advocate of MSEDCL stated that: a) MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015 makes it applicable to a consumer of who intends to use a Rooftop Solar Photovoltaic generating system having a capacity less than 1 MW. b) The Commissioning in its recent amendment dated 21 July, 2017 to the MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, 2015 has not considered amending the capping of 1 MW capacity provided under this Regulations for Solar Roof top Projects. Also, similar type of Petition filed by Nagpur Metro Rail Corporation Ltd in Case No 133 of 2016 and the Case is reserved for Order. c) Since BEL is third party vender, AFK, Pune should have filed this Petition. The Petition filed by BEL is not entitled for Net Metering as per the existing legal provisions and shall be treated as IPP/RE generator. The Commission has reserved the Case for final Orders. 7. BEL in its additional submission dated 12 January, 2018 (filed on 16 January, 2018) has stated that; 1) During the hearing on 8 January, 2018 MSEDCL raised the following issues; (i) BEL s Case is similar to the Petition filed by Nagpur Metro Rail Corporation Ltd. in Case No 133 of (ii) BEL s Petition is not valid for Net Metering facility for more than 1 MW as the Commission has not considered this in amendment in Regulations issued on 21 July, (iii) BEL is a third party and the generation project is not a captive power plant. Order in Case No 160 of 2017 Page 10

11 2) The Case of Maharashtra Metro Rail Corporation Ltd.(MMRCL) in Case No 133 of 2016(name changed from Nagpur Metro Rail Corporation Ltd.) is totally different in nature. Solar generation of MMRCL is at various locations within its premises and may not match with the consumption in that location. This situation of separation of load and generation does not qualify for facility of Net Metering as per the definition of Eligible Consumer and the term Premises used at number of places in the Regulations. Whereas in BEL s case the proposed project of 3 MW is within the premises of the Ordnance Factory, namely AFK, where the sanctioned load is 5 MVA(5 MW) and the load of 5 MVA is being fed through two 11 kv Express Feeders emanating from the 220 kv/22 kv/11 kv substation (referred to as MSEB- 512, within the premises of the consumer) and terminating in the factory premises of the consumer at 11 kv Bus. Thus BEL shall use the same service line from where the load of 5 MVA is being fed, for grid interaction and injection of solar generation. 3) MSEDCL during the hearing held on 8 January, 2018 has stated that the BEL s Petition is not valid for Net Metering facility for more than 1 MW as the Commission has not considered this in the amendment in Regulations issued on 21 July, This averment of MSEDCL is distraction from the main course. It may be stated that the in the amendment issued on 21 July, 2017 the points of consideration were limited. 4) MSEDCL during the hearing held on 8 January, 2018 has stated that BEL is a third party and the generation project is not a captive power plant. In this regard as already stated in its submissions dated 5 January, 2018 that its 3 MW Solar Power Plant is 100% owned by Government of India (GoI), which is being set up as per MNRE Defence Scheme for development of total of 300 MW Grid connected Solar Power Plants in defence establishments, in the premises of AFK, Pune one of the Ordnance factory Board (OFB). The project has been taken up by the Ministry of Defence under National Solar Mission of Government of India. This project is being executed through Defence PSU, BEL, Bangalore. GoI (Central Government) has % stakes in BEL as on 30 September, Both AFK and BEL come under Dept. of Defence Production, Ministry of Defence, GoI. It is submitted that the project meets all conditions of Captive power plant under Section 9 of the EA, It is confirmed once again that, there is no sale of power to third party. 5) In view of above, the matter may be considered by the Commission for according clearance under clause 13, power to relax of Net Metering Regulations, 2015 for implementation of the instant 3 MW of Grid connected Solar Power project in the premises of the Ammunition Factory, Khadki Order in Case No 160 of 2017 Page 11

12 (AFK), Pune with the facility of Net Metering based on specific merits of the Case. 8. BEL in its additional submission dated 13 February, 2018 (filed on 20 February, 2018) has stated as below; 1) BEL has sought this matter for early consideration because of the following reasons; (a) The proposed Solar power project is time bound project of Ministry of Defence (GoI) and as per the defence scheme of MNRE (Ref Annexure-1 of the Petition) the project is required to be completed upto December, (b) MSEDCL in response to our application for grid connectivity has conveyed in the Technical feasibility Report vide letter dated 18 November, 2018 that; ---provision of 11kV new bay for power evacuation can be made available by commissioning of 22/11 kv new S/stn in a space available adjacent to premises of 220 kv Khadki S/Stn and that separate 11 kv bays can also be provided for Ammunition Factory Khadki from this 22/11 kv S/Stn. (c) In this regard it is submitted that as the present load of 5 MW is already connected through 22/11 kv express feeders we proposed to evacuate 3 MW through the 11 kv Bus within the premises of AFK, Khadaki which is technically feasible as adequate transmission facility already exists. With this arrangement, we submitted our alternative proposal on 27 November, The matter needs to be considered under the provisions of para 2 of Section 9(2) of the EA, The cost of construction of new substation on the land to be provided by user would be additionally about Rs.10 Crores on the project with an estimated cost of Rs. 15 Crores. (d) The Commission is empowered to intervene in the above matter as per provisions under para 3 of Section 9(2) of the EA, 2003 and the functions of the Commission for promoting Renewable sources of energy as per Section 86(e) of the EA, ) Powers of the Commission in the Defence Projects: (a) The proposed 3 MW solar project is being executed by the Department of Defence Production (DDP) Ministry of Defence/GoI on its land in the Ordnance AFK, Pune and in the present Case, the Petitioner has sought relief from the Commission under the Net Metering Regulations, 2015for the implementation for 3 MW of Grid connected Solar Power Project at Ordinance AFK, Pune with the facility of Net Metering. Order in Case No 160 of 2017 Page 12

13 (b) The Commission is empowered to kindly consider for special treatment and for relaxation of Regulations under Section 184 of the EA, 2003 which reads as; Section 184. (Provisions of the Act not to apply in certain cases): The provisions of this Act shall not apply to the Ministry or Department of the Central Government dealing with defence, Atomic Energy or such other similar Ministries or Departments or undertakings or Boards or institutions under the control of such Ministries or Departments as may be notified by the Central Governments. 3) In view of above, the Commission is requested for early consideration for implementation of the aforesaid time-bound project of the Ministry of Defence/GoI and for passing its appropriate orders in the matter. 9. MSEDCL in its submission dated 14 May, 2018 (filed on 15 May, 2018) has stated as below; 1) MSEDCL by way of abundant caution is filing the present submissions to the additional written submission dated 13 February, 2018 filed by BEL. MSEDCL understands that the captioned matter has been reserved for orders vide Daily Order dated 8 January, However even after the same being heard and reserved for orders, the Petitioner has been making additional submissions time and again without even seeking leave of the Commission. MSEDCL certainly does not support such practice and have strong objection to such type of submissions of the Petitioner. However to safeguard its interest against the additional issues raised by the Petitioner vide its subsequent submissions, MSEDCL with abundant caution is craving leave of the Commission to take the present submissions on record. 2) BEL requested for evacuation of Solar power from its proposed 3 MW solar power project in the premises of AFK, Pune through 11 kv Bus within the premises of AKF, Khadaki under Net Metering Regulations, ) AFK, Pune is a HT Consumer bearing No and fed through two express feeders (AFK-I and AFK-II). BEL is going to establish 3 MW solar project in the factory premises for the use of AFK. 4) Net Metering Regulations, 2015 makes it applicable to a consumer of Distribution Licensee who intends to use a Rooftop Solar PV Generation system having capacity less than 1 MW. Thus the Petitioner is not entitled for Net Metering as per the existing legal provisions but be treated as IPP/RE Generator. However the Petitioner can wheel the power from the said 3 MW Order in Case No 160 of 2017 Page 13

14 solar generator as per the provisions of DOA Regulations, 2016 to the eligible consumer. 5) To avail Open Access, as per the present practice of MSEDCL, the power from any generation is evacuated to the nearest EHV/HV substation through dedicated feeder for proper/complete evacuation and accounting of power. 6) Accordingly as per joint site visit of MSEDCL, MSETCL authorities and BEL representatives for grid connectivity of 3 MW solar plant, it is observed that a separate 11 kv bay cannot be provided for power evacuation at 220 kv Khadaki S/s. Hence, the evacuation is suggested by establishment of new 22/11 kv substation in factory premises for evacuation of 3 MW power. But BEL has shown unwillingness to set up new 22/11 kv substation as suggested by MSEDCL authorities and proposed alternate option for evacuation of 3 MW power on existing 11 kv AFK-I and AFK-II express feeders of AFK. 7) However the evacuation of power from any generator by connecting it to the existing feeder is not allowed in view of the issues relating to safety and proper accounting of power generated. It is therefore prayed that the Commission may graciously be pleased to take the additional submission of MSEDCL on record for consideration while passing the final Order. It is further prayed that not to consider the present submissions of the Petitioner and the Petition be dismissed. 10. The Commission has reserved this matter for final Orders vide its Daily Order dated 8 January, At the hearing held on 11 June, 2018, the Parties were informed of the Commission s decision to constitute a two Member Bench to re-hear and decide this case. Parties gave their consent to further hearing of the matter as being in continuance of the earlier proceedings. 11. The proceedings of the hearing held on 11 June, 2018 are summarized as follows: 1) The Representative of Bharat Electronics Ltd (BEL) stated that: (a) The Project is to be implemented for captive use and not for third party sell. The project is under Ministry of Defence Government of India (GoI) and 100% owned by GoI only. Project will be executed in Ordinance Factory, Khadki, Pune (b) The commission in its order dated 16 January, 2018 in Case No 133 of 2016 does not provided relaxation to Nagpur Metro Rail Corporation Ltd. Order in Case No 160 of 2017 Page 14

15 because generation is at one place and utilisation at other, whereas in case of BEL generation and utilisation of power is at the same place. (c) As per Section 184 of Electricity Act 2003, Provisions of the EA, 2003 are not applicable to BEL as it is under Ministry of Defence, Government of India. (d) BEL is not seeking amendment to the regulation but relaxation for executing 3 MW Solar Power Project under the provisions of MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, ) Advocate of MSEDCL stated that (a) At the time of framing these regulations, views from various stake holders, distribution companies have been taken into account and the Regulations are notified after public consultation process with statement of reasons for the same. (b) As per the Commission s Net Metering for Roof-top Solar Photo Voltaic Systems Regulations, 2015 Net Metering facility for more than 1 MW is not permissible. So permission cannot be granted. (c) BEL is now seeking amendment to the Net Metering for Roof-top Solar Photo Voltaic Systems Regulations, 2015.The Commission in its Order dated 16 January, 2018 in Case No 133 of 2017 has specifically mentioned the logic behind fixing the capacity limit of 1 MW and implication on Distribution Licensees. (d) Based on this case, the Commission may take a view whether to initialize the process for amendment to the regulation or otherwise. Commission s Analysis and Rulings 12. The Commission notes that BEL being a Developer of the Solar project in the premises of AFK has filed the present Petitions seeking relaxation for executing its 3 MW Solar Power Project under the provisions of MERC (Net Metering for Roof-top Solar Photo Voltaic Systems) Regulations, The Commission notes that under the present Case BEL has stated that, Ministry of Defence approved a proposal vide letter dated 7 March, 2016 for setting up 150 MW grid connected Solar Power Plants through BEL on the lands provided by Ordnance Factories. Further, AFK, Pune has been identified under the Defense scheme, for setting up of grid interactive 3 MW PV Solar Power Plant. The Commission notes the fact that AFK, Pune is an existing consumer of MSEDCL having 5 MVA sanctioned contract demand and BEL has been selected as Project Developer for installation of 3 MW Solar power project in AFK s premises. 13. BEL has stated that, the solar power generated by its 3 MW Solar project will be supplied to AFK at Rs.4.50 per unit for 25 years. The annual average Order in Case No 160 of 2017 Page 15

16 consumption of electricity in AFK, Pune is 14.8 MUs and estimated annual generation of 4.8 MUs from proposed 3 MW Solar Power Plant. As per estimation, about 16% of total energy generated over the year may flow to grid (i.e. about 0.8 MUs out of total estimated annual generation of 4.8 MUs) 14. However, the Net Metering Regulations, 2015 (as amended in 2017 to cover both Solar and other RE) are applicable to an Eligible Consumer who uses a RE Generating System with capacity below 1 MW in its premises to meet all or part of its own electricity requirement through a Net Metering Arrangement. In such an Arrangement, a RE Generating System with a Net Meter at a consumer s premises delivers surplus electricity to the Distribution Licensee after setting off the electricity supplied to the consumer by the Licensee. The Regulations define Eligible Consumer as follows: 2.1(g) Eligible Consumer means a consumer of electricity in the area of supply of the Distribution Licensee who uses or intends to use a Renewable Energy Generating System having a capacity less than 1 MW, installed on a roof-top or any other mounting structure in his premises, to meet all or part of his own electricity requirement, and includes a Consumer catering to a common load such as a Housing Society; Provided that such generating System may be owned and/or operated by such Consumer, or by a third party leasing such System to the Consumer; 15. Moreover, Regulation 10.3 of these Regulations provides that the unadjusted net credited units of electricity as at the end of each financial year shall be purchased by the Distribution Licensee at its Average Cost of Power Purchase as approved by the Commission for that year. Thus Net Metering Regulations provides for netting of Solar energy (between consumption and injection) and does not envisaged direct sale of Solar energy from Solar Generator to the eligible consumer. Further it is envisaged that Distribution Licensee shall purchase only the unadjusted net surplus energy from the eligible consumer (who is also acting as a Solar Generator) at the Average Cost of Power Purchase at the end of each financial year. Whereas under the present Case BEL has proposed to sell the Solar power generated by its 3 MW Solar project to AFK at Rs.4.50 per unit for 25 years. Such a sale is not envisaged under the Net Metering arrangement under the provisions of Net Metering Regulations, Further the Commission also notes that, BEL who is a Developer of the Solar project in the premises of AFK, has filed the present Petition seeking relaxation for executing its 3 MW Solar Power Project under the provisions of Net Metering Regulations, In fact AFK, Pune who is a HT connection Consumer (SC. No ) of MSEDCL, would be an Eligible Consumer under the provisions of Net Metering Regulations, 2015 for Net Metering Order in Case No 160 of 2017 Page 16

17 arrangement as cited above and should have filed the present Petition, which is not the Case. 17. The Commission also notes MSEDCL submission dated 28 December, 2017 that, BEL being a Developer of the Solar project of 3 MW in the premises of AFK, is not entitled for net metering arrangement as the Net Metering Regulations, 2015 is applicable to Roof-top Solar PV system having a capacity less than 1 MW. MSEDCL stated that BEL be treated as IPP/RE generator which is a third party entity installing and owning the Solar plant and sale of power to AFK through a supply agreement at the rate of Rs per unit for 25 years. Such an agreement amounts to clear third party sale. In light of MSEDCL s submission the Commission observes that BEL can apply for and avail of various regulatory provisions of Distribution Open Access Regulations along with Net Metering Regulations, 2015, so as to serve its purpose. 18. The Commission observes that BEL in its additional submission dated 13 February, 2018 and also during the hearing held on 11 June, 2018 has raised an issue of special treatment and for relaxation of Net Metering Regulations, 2015 under section 184 of the EA, 2003 which is reproduced below; 184. Provisions of Act not to apply in certain cases The provisions of this Act shall not apply to the Ministry or Department of the Central Government dealing with Defence, Atomic Energy or such other similar Ministries or Departments or undertakings or Boards or institutions under the control of such Ministries or Departments as may be notified by the Central Government. The Commission notes that AFK Pune has been and continues to be a HT consumer of MSEDCL and is covered by various provisions of the EA, 2003 and its Regulations relating to metering, billing, theft, etc. AFK, Pune cannot take cover of the provisions under section 184 of the EA, 2003 as per its convenience. Besides, since BEL is a Developer of the Solar project the said provision of section 184 of EA, 2003 will not be applicable to it. Plain reading of the section 184 does not imply that there could be relaxation of provisions of Net Metering Regulations, 2015 as contended by the Petitioner i.e. BEL. In fact, as stated, above under the present Case even an eligible consumer i.e. AFK, Pune who is a HT connection Consumer (SC. No ) of MSEDCL cannot claim exemption under section 184 of the EA, The moment a consumer of electricity becomes a consumer of a particular Distribution Licensee, the Commission s Regulations become applicable. It is imperative therefore that AFK, Pune as a HT Consumer of MSEDCL is also bound by the provisions of the EA, 2003 and the relevant Regulations issued by the Commission from time to time. The contention of BEL seeking special Order in Case No 160 of 2017 Page 17

18 treatment and for relaxation of Net Metering Regulations, 2015 under section 184 of the EA, 2003 would not sustain and deserves to be rejected as such. 19. The Commission in the recent past by its Order dated 16 January, 2018 in Case No 133 of 2016(Petition of Maharashtra Metro Rail Corporation Ltd. seeking relaxation in the capacity limits for eligibility under the Roof-top Solar PV Net Metering Regulations, 2015) has discussed in detail the rationale for prescribing the capacity limit of Solar PV plant upto 1 MW under Net Metering Regulations, Commission did not provide any relaxation to Maharashtra Metro Rail Corporation Ltd. the Petitioner in that case with regards to capacity limit of 1 MW for Solar PV system under Net Metering Regulations, In view of foregoing, the Commission deems it fit to reject the contention of BEL for availing the facility of Net Metering under the provisions of Net Metering Regulations, 2015 upon implementation of its 3 MW Grid Connected Solar power project at Ordinance Ammunition Factory, Khadki (AFK), Pune. The Petition of Bharat Electronics Limited in Case No.160 of 2017 stands disposed of accordingly. Sd/- (Mukesh Khullar) Member Sd/- (Anand B. Kulkarni) Chairperson Order in Case No 160 of 2017 Page 18