The Maharashtra Electricity Regulatory Commission (MERC) has directed Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) to pay Rs. 11.42 crore to renewable energy developer Vena Energy MH Wind Power Pvt. Ltd. towards outstanding Late Payment Surcharge (LPS) and carrying cost interest. The order resolves a dispute related to delayed payments for wind power supplied by Vena Energy’s projects in Maharashtra.
Vena Energy had filed a petition before MERC on February 26, 2025, seeking directions against MSEDCL for the recovery of unpaid LPS and related interest. The company operates 30 MW of wind power projects in Sangli district, Maharashtra, and supplies electricity to MSEDCL under multiple Wind Energy Purchase Agreements (WEPAs).
As per Article 10.05 (d) of the agreements, MSEDCL is required to clear monthly invoices within 60 days from the date of receipt. If payments are delayed beyond this period, MSEDCL is liable to pay LPS at a rate of 1.25% per month.
Vena Energy informed the Commission that MSEDCL had repeatedly delayed payments for electricity supplied between July 2020 and November 2024. Due to these delays, the company claimed unpaid LPS amounting to Rs. 7.10 crore. It also sought carrying cost interest at 1.25% per month on delayed payment of the surcharge amount.
MSEDCL opposed the claims, arguing that payments related to the period between July 2020 and January 2022 were beyond the limitation period prescribed under the Limitation Act, 1963. The distribution company stated that monetary claims generally need to be filed within three years and maintained that its liability should only be considered for the period from February 2022 to November 2024, amounting to around Rs. 2.07 crore.
MSEDCL also challenged Vena Energy’s demand for interest on unpaid LPS, stating that there was no specific contractual provision allowing additional interest on delayed surcharge payments.
While examining the matter, MERC considered the impact of the COVID-19 pandemic on limitation periods. The Commission referred to the Supreme Court’s decision that excluded the period from March 15, 2020, to February 28, 2022, from limitation calculations due to pandemic-related disruptions. Based on this extension, MERC concluded that Vena Energy’s claims were valid and could not be considered time-barred.
On the issue of interest on unpaid LPS, MERC observed that delayed payment of legitimate dues affects the financial position of power generators by reducing the value of money over time. The Commission held that withholding payable surcharges requires compensation through interest payments.
After reviewing the submissions and calculations, MERC approved Vena Energy’s full claim of Rs. 7.10 crore towards unpaid LPS. Additionally, it allowed Rs. 4.31 crore as interest on delayed LPS payments, calculated up to July 31, 2026.
The Commission directed Vena Energy to issue supplementary invoices for the approved amount and instructed MSEDCL to clear the total payment of Rs. 11.42 crore within the timeline specified under the agreements. The order reinforces the importance of timely payments under renewable energy power purchase agreements and provides financial relief to renewable energy developers facing delayed receivables.
