# MERC Maharashtra State Electricity Transmission Co. Ltd. Multi-Year Tariff (MYT) Order for FY2025-26 to FY2029-30 (Case No. 178 of 2024)

- **Issuing authority:** Maharashtra Electricity Regulatory Commission (MERC)
- **Case number:** 178 of 2024
- **Order date:** 28 March 2025
- **Petitioner:** Maharashtra State Electricity Transmission Co. Ltd. (MSETCL)
- **Order type:** Multi-Year Tariff (MYT) Order
- **Control period:** CP-5 (FY2025-26 to FY2029-30)
- **Tariff regime:** Section 62, Electricity Act 2003
- **Length:** 383 pages
- **Official PDF:** https://merc.gov.in/wp-content/uploads/2025/03/MYT-Order-of-MSETCL-Case-No.-178-of-2024-_28-03-2025_uploaded.pdf

## Section index

| Section | Title | Page |
|---|---|---|
| 1 | Introduction | 17 |
| 1.1 |  Background | 17 |
| 1.2 |  Multi-Year Tariff Regulations and Control Period | 17 |
| 1.3 |  Petition and main Prayers of MSETCL | 17 |
| 1.4 |  Admission of Petition and Public Consultation Process | 17 |
| 1.5 |  Organisation of the Order | 17 |
| 2 | Suggestions / objections received, MSETCL’s response and the Commission’s ruling | 18 |
| 2.2 |  Impact of Past disallowed Capitalisation against unutilised bays from approved scheme | 23 |
| 2.3 |  Return on Equity | 25 |
| 2.4 |  Capitalisation and Gross Fixed Assets | 26 |
| 2.5 |  Non-Tariff Income | 28 |
| 2.6 |  Issue of GMR Warora Energy Ltd (GWEL) InSTS Grid connectivity to STU for evacuation of MSEDCL share of 200 MW Power | 29 |
| 2.7 |  Issue of Overloading of 220 kV double circuit Babhaleshwar – Nashik Line | 30 |
| 2.8 |  Issue of Line loading of 400 kV Chakan – Talegaon Line | 33 |
| 2.10 |  Non-Availability of Available Transmission Capacity (ATC) for the upcoming Projects | 34 |
| 3 | Summary of Impact of Disallowed Capitalisation for previous years | 34 |
| 3.1 |  Background / MSETCL submission: | 37 |
| 3.2 |  Impact of past disallowed capitalisation now being claimed, which is put to use | 38 |
| 3.3 |  Impact of past disallowed capitalisation against unutilised bays from approved schemes (as identified in MTR Order in Case No. 232 of 2022), which are put to use | 43 |
| 3.4 |  Impact of past disallowed Capitalisation against balance Unutilised (33/22/11 kV) bays till FY 2014-15, which is put to use | 47 |
| 4 | Impact of Review Order | 47 |
| 4.1 |  Introduction | 49 |
| 4.2 |  Utilisation of Special reserve Amount | 49 |
| 4.3 |  Impact on account of exclusion of Past revenue gap of Rs 236.63 Crore from computation of effective revenue gap for FY 2019-20 | 50 |
| 4.4 |  Impact of Disallowance of the reactor scheme funded through PSDF grant | 54 |
| 4.5 |  Impact of Utilization of Special Reserve Amount as approved by the Commission | 55 |
| 5 | Truing-up of ARR for FY 2022-23 and FY 2023-24 | 55 |
| 5.1 |  Background | 55 |
| 5.2 |  Operation & Maintenance Expenses for FY 2022-23 and FY 2023-24 | 61 |
| 5.3 |  Employee Expenses | 63 |
| 5.4 |  Administrative and General Expenses | 72 |
| 5.5 |  Repairs and Maintenance Expenses | 79 |
| 5.6 |  Normative O&M expenses for FY 2022-23 & FY 2023-24 | 81 |
| 5.7 |  Capital Expenditure and Capitalisation | 93 |
| 5.8 |  Depreciation for FY 2022-23 and FY 2023-24 | 126 |
| 5.9 |  Interest on Long Term Loan for FY 2022-23 and FY 2023-24 | 129 |
| 5.10 |  Other Finance Charges for FY 2022-23 and FY 2023-24 | 133 |
| 5.11 |  Interest on Working Capital for FY 2022-23 and FY2023-24 | 133 |
| 5.12 |  Return on Equity for FY 2022-23 and FY 2023-24 | 136 |
| 5.13 |  Contribution to Contingency Reserves for FY 2022-23 | 142 |
| 5.14 |  Revenue from Transmission Charges, Income from Wheeling Charges and Point of Connections (PoC) Charges for FY 2022-23 and FY 2023-24 | 143 |
| 5.15 |  Non-Tariff Income for FY 2022-23 and FY 2023-24 | 149 |
| 5.16 |  Sharing of efficiency gains /(losses) | 150 |
| 5.17 |  Summary of Truing -up of ARR for FY 2022-23 and FY 2023-24 | 154 |
| 6 | Provisional Truing-up of ARR for FY 2024-25 | 154 |
| 6.1 |  Background | 158 |
| 6.2 |  Operation & Maintenance Expenses for FY 2024-25 | 158 |
| 6.3 |  Employee Expenses | 159 |
| 6.4 |  Administrative and General Expenses | 161 |
| 6.5 |  Repair and Maintenance (R&M) Expenses | 162 |
| 6.6 |  Normative O&M expenses for FY 2024-25 | 163 |
| 6.7 |  Capital Expenditure and Capitalization for FY 2024-25 | 171 |
| 6.8 |  Depreciation for FY 2024-25 | 174 |
| 6.9 |  Interest on Long Term Loan for FY 2024-25 | 176 |
| 6.10 |  Other Finance Charges for FY 2024-25 | 178 |
| 6.11 |  Interest on Working Capital for FY 2024-25 | 178 |
| 6.12 |  Return on Equity for FY 2024-25 | 179 |
| 6.13 |  Contribution to Contingency Reserves for FY 2024-25 | 182 |
| 6.14 |  Revenue from Transmission Charges, Income from Wheeling Charges and Point of Connection (PoC) Charges for FY 2024-25 | 183 |
| 6.15 |  Non-Tariff Income for FY 2024-25 | 185 |
| 6.16 |  Summary of Provisional Truing-up of ARR for FY 2024-25 | 186 |
| 7 | Aggregate Revenue Requirement for the 5th Control period from FY 2025-26 to FY 2029-30, revenue gap and impact on transmission tariff | 186 |
| 7.1 |  Background | 186 |
| 7.2 |  Operation & Maintenance Expenses for FY 2025-26 to FY 2029-30 | 190 |
| 7.3 |  Opex for FY 2025-26 to FY 2029-30 | 203 |
| 7.4 |  Capex and Capitalisation for FY 2025-26 to FY 2029-30 | 204 |
| 7.5 |  Gross Fixed Assets (GFA) for FY 2025-26 to FY 2029-30 | 207 |
| 7.6 |  Depreciation for FY 2025-26 to FY 2029-30 | 210 |
| 7.7 |  Interest on Loan for FY 2025-26 to FY 2029-30 | 213 |
| 7.8 |  Interest on Working Capital for FY 2025-26 to FY 2029-30 | 216 |
| 7.9 |  Other Finance Charges for FY 2025-26 to FY 2029-30 | 216 |
| 7.10 |  Return on Equity for FY 2025-26 to FY 2029-30 | 217 |
| 7.11 |  Contribution to Contingency Reserve for FY 2025-26 to FY 2029-30 | 220 |
| 7.12 |  Income from Wheeling charges and point of connection (PoC) Charges for FY 2025-26 to FY 2029-30 | 221 |
| 7.13 |  Non-Tariff Income for FY 2025-26 to FY 2029-30 | 222 |
| 7.14 |  Aggregate Revenue Requirement for FY 2025-26 to FY 2029-30 | 223 |
| 7.15 |  Cumulative Revenue (Gap)/Surplus upto FY 2024-25 | 225 |
| 7.16 |  Utilisation / Treatment of Special Reserve amount | 231 |
| 8 | Other issues raised by MSETCL for Commission’s approval | 231 |
| 8.1 |  Installation of Rooftop Solar Projects to reduce Energy consumption at Sub-station of MSETCL | 235 |
| 8.2 |  Formulation of methodology for recovery of O&M charges by MSETCL from InSTS Licensee and Transmission Service Provider (TSP) under TBCB | 238 |
| 8.3 |  Refund of evacuation expenditure for Wind & Bagasse Projects | 240 |
| 8.4 |  Interest Income – Additional demand note to MEGPTCL towards 2x 765 kV Bays at 765 kV Ektuni substation – Rs.6.42 Crore | 242 |
| 9 | Earlier directives, and compliance status | 242 |
| 9.1 |  Background | 242 |
| 9.2 |  Cost Audit Report (Order in Case No. 232 of 2022) | 243 |
| 9.3 |  Scheme being delayed as per Order in Case No. 302 of 2019 (Order in Case No. 232 of 2022) | 246 |
| 9.4 |  Retirement of Assets (Order in Case No. 232 of 2022) | 249 |
| 9.5 |  Submission approach of capitalisation (Order in Case No. 232 of 2022) | 251 |
| 9.6 |  Expedite work in 400 kV Line from Babhaleshwar to Mumbai (Kudus) (Order in Case No. 232 of 2022): | 255 |
| 9.7 |  Disallowance of the reactor scheme funded through PSDF grant (8 No. Reactor scheme) (Order in Case No. 137 of 2023) | 255 |
| 9.8 |  Past Disallowed Capitalisation (Order in Case No. 232 of 2022) | 256 |
| 9.9 |  Gross Fixed Assets (GFA) for MTR Period (Order in Case No. 232 of 2022) | 257 |
| 9.10 |  Shifted Scheme (Capitalisation is Shifted to “put to use” years (Order in Case No. 232 of 2022)) | 257 |
| 9.11 |  Impact of Exclusion of past revenue gap of Rs 236.63 Crore (Order in Case No. 137 of 2023) | 261 |
| 9.12 |  Penalty of Rs 48 Crore imposed on MSETCL in the matter of 400/220 kV switchyard at GMR Warora Energy Ltd. Power plant premises (Order in Case No. 137 of 2023) | 262 |
| 10 | Compliance to the Directive in Non-Tariff related orders passed in Present Control Period | 262 |
| 10.1 |  Case No. 202 of 2020 dated 22.10.2020 | 263 |
| 10.2 |  Case No. 215 of 2020 dated 31.12.2020 | 264 |
| 10.3 |  Case No. 58 of 2021 dated 09.08.2021 | 266 |
| 10.4 |  Case No. 236 of 2020 dated 14.01.2021 and Case No. 137 of 2021 dated 28.10.2021 | 268 |
| 10.5 |  Case No. 210 of 2020 dated 31.01.2021 | 268 |
| 10.6 |  Case No. 62 of 2022, Case No. 63 of 2022 and Case No. 64 of 2022 | 269 |
| 11 | Recovery of transmission charges | 269 |
| 12 | Applicability of the Order | 269 |
| 13 | Annexure-1: List of Persons Present at the Technical Validation Session on 27 November 2024 | 269 |
| 14 | Annexure-2: List of Persons Present at the Public Hearing on 07 January 2025 | 271 |
| 15 | Annexure-3: List of Schemes pertaining to Past Disallowed Capitalisation considered for approval: | 274 |
| 16 | Annexure-4: List of Schemes against which capitalisation is claimed by MSETCL in FY 2022-23 to FY 2029-30: | 281 |

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