MSEDCL has filed a petition for determination of aggregate revenue requirement (ARR) and tariffs for the 4th MYT control period (FY21 to FY25). In the same filing, MSEDCL has also proposed the performance and cost true-up for FY18 and FY19 and a provisional true-up for FY20. Our key comments and suggestions for control period are summarised below:

• Out of the proposed revenue increase of Rs. 60,000 crore, Rs. 17,000 crore is required to adjust costs for increase in sales in the control period, which is a readjustment of costs rather than an increase in costs resulting in no contribution to actual tariff increase.
• Further, Rs. 11,000 crores is required to meet actual increase in costs in the Control Period. The increase in costs can be easily met through efficiency improvements in the control period. Therefore, no additional increase in revenue is required to meet these costs.
• Thus, as against MSEDCL proposal for 20% increase in tariff (Rs. 1.30/kWh on an average) from retail tariffs during the Control Period, MSEDCL requires only a one-time 5% tariff increase (around Rs. 0.35/kWh on average) for FY21. This one-time increase should be sufficient to cover past dues and pending revenue gaps amounting to about Rs. 30,000 crore and there should not be any additional tariff increase for the control period.
• ‘Behind the meter’ renewable energy generators should be treated like any other captive generator. Such consumers can pay applicable standby charges proposed by MSEDCL in lieu of additional fixed charges.
• Grid support charges should reflect cost of grid services provided by MSEDCL which would be around Rs.0.9-1.25/kWh for all units of generation and an additional Rs 1.75/kWh on banked energy for the Control Period.
• MERC should ensure ToD tariffs reflect changes in load due to proliferation of renewable energy. Further, MERC should also introduce seasonal ToD tariffs and direct MSEDCL to introduce ToD metering for non-agricultural consumers with connected load > 10 kW in phased manner during the MYT period.
• Rebate for incremental consumption is a welcome step and should be extended to partial  open access and captive consumers
• It is essential to provide increased attention to quality of supply and service issues. Therefore, MSEDCL should be directed to publish detailed periodic reports regarding quality of supply and service. Further, the Commission should conduct an independent public review of crucial supply and service quality parameters of MSEDCL.
• Imperative for MERC and MSEDCL to publish a comprehensive data protection policy to protect consumer interest especially with increase in SMS services and smart metering.
• Clarity is required on the appointment of new franchisees in Malegaon, Shil, Mumbra and Kalwa and need for reporting of pending dues from terminated franchisees impact of power availability due to coal shortages, debt restructuring for IPPs, estimation of PGCIL cost projections.
• MSEDCL is currently projecting a shortfall in meeting revised RPO targets. Given the potential savings from increase RE procurement, compliance to MERC regulations must be ensured.