OFFICE NOTE: COMMERCIAL SECTION

CE(Comm)/ASC/MERC/
Date:

Sub: Guidelines for cases pertaining to Additional Supply Charges (ASC).

Ref: 1) Review Petition (Case No.126/2017) filed by Shri.B.R.Mantri.
2) Review Petition (Case No.130/2017) filed by Shri. Suresh Sancheti.

MSEDCL, had filed a petition (101 of 2016) before MERC for discontinuing the payment of any
further claims of industrial consumers towards refund of Additional Supply Charges(ASC) for application
received after 01st April, 2016. Hon'ble Commission vide Para no.15 of its Order dated 07.07.2017 issued
the following directives;
Hon'ble Commission while issuing its Order dated 07.07.2017 had remarked as follows:
 …..the refund of ASC would be tenable in cases of any Load Shedding beyond that which was
envisaged, if at all, as distinct from supply interruptions. Supply interruptions would be governed
in the normal course by the provisions of the Electricity Supply Code, 2005 read with Regulations
6 and 12 and Appendix A of the Standards of Performance Regulations, 2005 (applicable at that
time).
 ....MSEDCL may have acted on its bonafide understanding of various Orders and clarifications
relating to the nature of ASC and its refund, the Commission directs that no further such refunds
shall be made from the date of this Order irrespective of whether or not any applications are
pending.

Aggrieved by this decision, two review petitions have been filed (ref.no.1&2) against the MERC
Order as above. During the hearing on 12.12.2017, the petitioners alleged that the MERC clarificatory
Order dated 24 August, 2007 regarding ASC has been conveniently misinterpreted by MSEDCL and
undue benefit has been extended to few select consumers by allowing refund of ASC for minor interruption
(not load shedding).

Brief History:

The Hon’ble Commission has introduced the concept of ASC in its Tariff Order for MSEDCL in
Case No.54 of 2005 dated 20.10.2006. ASC was applicable to the consumers who were benefiting from the
less load shedding hours and were also availing costly power at Base retail Tariff. Some of the HT
consumers approached MSEDCL with a request for refund of ASC charges for the period May 2007 to
May 2008 as they faced interruption/load shedding even after paying ASC towards costly power.

 In MERC tariff order 65/2006 dated 18.05.2007, MERC clarified about non levy of ASC tariff at
following paras;
30 -----
Note: ASC will not be applicable for non-continuous industry and water works facing two or more
days of load shedding

32. ASC will not be levied on industries and water works facing two or more days of load
shedding, as well as on other categories like domestic, commercial, etc.,irrespective of their
location.

 In clarificatory order dated 24.08.2007 i/r.o case no.65/2006, at para no.6 regarding reference
consumption to be considered for levy of ASC on page no.24, MERC has clarified that;
  For consumers connected on express feeders, it is presumed that the supply is given continuously
and hence, any such non-supply for production activities with prior written intimation or
subsequent acceptance by MSEDCL will have to be considered.
 In case of consumers connected on non-express feeders, staggering load shedding of 16 hours is
done every week. Any additional non-supply for such consumers, will qualify under this
clarification, and the reference consumption will have to be proportionately restated.

Considering the consumer's representation and financial implications involved due to MERC order
it was decided to contemplate upon the matter centrally at H.O level. The field offices were informed to
verify the data of interruption from Substation record prior to the refund. In order to maintain uniformity in
decision and to avoid further litigations the matter was placed before Recovery Committee for approval
regarding withdrawal of ASC during the period from May 2007 to May 2008 only. After, much
deliberation the proposal was approved by the Competent Authority as per the following criteria;

a. For Continuous category Consumers: Refund of the ASC amount was considered for
the period from May, 2007 to May, 2008 only for those months in which there was non-
supply or load shedding.

b. For Non-Continuous category consumers: Refund of ASC was considered for the period
from May, 2007 to May, 2008 only for those months in which the interruption or load
shedding was more than 64 hours in a month.

MSEDCL was accepting application and has been honoring the claims of the Industrial consumers
with regards to ASC even after 8 years after the issuance of the MERC order by verifying the interruption
of supply details from the field offices on one to one basis. However, the information for ascertaining the
claims of the consumer's regarding tripping and interruptions related to ASC refund was becoming difficult
to verify with the passage of time. Hence, it was decided to approach MERC as the Order cannot be
operated in perpetuity. MSEDCL thus filed a Petition (Case No. 101 of 2016) before MERC on 21 July,
2016 for discontinuing any further refunds of Additional Supply Charge (ASC) to consumers against
applications received after 1 April, 2016.

Hon’ble Commission issued order on 07.07.2017 as mentioned above for discontinuing the practice of
refund of ASC from the date of its order.

Mr. Suresh Sancheti from Pune has filed an intervention application dated 15.12.2016 with MERC
against MSEDCL's said petition. The petitioners as per the reference as above have filed separate petitions
against the above order and have prayed for review of the order. The contention of the petitioners before
MERC, in brief, is as follows;

 ASC was payable by the consumers against no load shedding or comparatively less load shedding
and it has no relevance for interruption in power supply.
 The ASC provisions as per the Tariff Orders have conveniently been misinterpreted by MSEDCL
and undue benefit has been extended to few select consumers by allowing refund of ASC for
minor interruption, whereas conceptually ASC was linked with load shedding.

 During the period May 2007 to May 2008, Industries on express feeders were never subjected to
any load shedding; as well industries on non-express feeder were subjected to only one staggering
day. In such circumstances the refund of ASC on the grounds of minor interruptions (Not load
shedding) without verifying the facts cannot be understood.
  MSEDCL has given the ASC refund to selected consumers who have directly approached the
corporate office but not allowed other consumers of same feeder. If MSEDCL has allowed one
consumer on same feeder for ASC refund due to power failures, the same criteria has to apply to
all consumers belonging to same feeder.

Daily order in Case No.126 of 2017 dated 12.12.2017.

The MERC while issuing the daily order has remarked as follows;

3(b). The Commission in its impugned Order dated 7 July, 2017 has clearly stated that ASC refund is only
related to additional Load Shedding and not with the interruptions which are to be dealt with as per
provisions of Supply Code and SoP Regulations. MSEDCL will look into the details of 99 consumers to
whom ASC refund was given.

ASC refund has been approved for 99 nos of consumers till April 2017 out of which 62 no of consumers
were availing continuous supply and were considered for refund only in the month in which they faced
interruptions. Also 37 nos of consumers were getting non continuous supply and were considered for ASC
refund for only those months in which the interruption or load shedding was more than 64 hours in a month,
after submission of documentary evidence and verification thereof.

Proposal :

The refunds were made as per the interpretation of the MERC Clarificatory Order dated
24.08.2007. The directives of MERC were followed in true spirit, and the facts have been placed before the
Hon'ble Commission during various hearings. Also, MERC as per Order dated 07.07.2017 in case
no.101/2016 has rejected the petitioners claim. However, considering the review petitions being filed
against the MERC order and the MERC remarks as above in its daily order dated 12.12.2017, it is
proposed as follows;

The details of 99 no of consumers to whom ASC refund was given on the basis of staggering load shedding
(non continuous feeder consumer) and on the basis of interruption ( continuous feeder consumers) may be
submitted to MERC.

The draft of the letter to MERC is attached herewith for approval , if approved same will be submitted to
the MERC.

Submitted for approval please.

Chief Engineer (Commercial)

Chief Legal advisor

Executive Director (Dist-II)

Director (Operations)
Chairman & Managing Director

Hon'ble Commission while issuing its Order dated 07.07.2017 had remarked as follows:
 …..the refund of ASC would be tenable in cases of any Load Shedding beyond that which was
envisaged, if at all, as distinct from supply interruptions. Supply interruptions would be governed
in the normal course by the provisions of the Electricity Supply Code, 2005 read with Regulations
6 and 12 and Appendix A of the Standards of Performance Regulations, 2005 (applicable at that
time).
 ....MSEDCL may have acted on its bonafide understanding of various Orders and clarifications
relating to the nature of ASC and its refund, the Commission directs that no further such refunds
shall be made from the date of this Order irrespective of whether or not any applications are
pending.

In its clarificatory Order dated 24.08.2007 Hon'ble Commission issued following directives;

 The Commission had decided to levy the ASC on the share of costly power consumption,
subject to the comparison of monthly consumption with the consumption in the reference period.
 In such cases where the reference consumption has been suppressed due to non-supply by
MSEDCL with specific intimation/ acceptance to that effect, the reference consumption will be
normalized on a proportionate basis, so that the reference consumption reflects the consumption
that would have occurred had MSEDCL not reduced the supply due to no fault of the consumers.
 For consumers connected on express feeders, it is presumed that the supply is given continuously
and hence, any such non-supply for production activities with prior written intimation or
subsequent acceptance by MSEDCL will have to be considered.
 In case of consumers connected on non-express feeders, staggering load shedding of 16 hours is
done every week. Any additional non-supply for such consumers, will qualify under this
clarification, and the reference consumption will have to be proportionately restated.
 This clarification was not applicable for load shedding undertaken by MSEDCL on the basis of
published load shedding schedules.

 In order to get relief, such consumers will have to submit documentary evidence of non-supply
during the reference month or reference period, under the instructions of MSEDCL or a written
acceptance from the concerned MSEDCL officer about such case.