Twelve Weeks to Clarity: How MERC’s Rehearing Could Reshape Tariffs, Storage Economics and Investment

The Supreme Court has remanded the Maharashtra MYT review back to MERC and ordered a fresh decision within 12 weeks, keeping existing tariffs in force while mandating stakeholder consultation — a move that could reshape developer economics, consumer bills, and the pace of storage and renewable integration in the state.

The dispute centers on MERC’s Multi‑Year Tariff (MYT) order and a subsequent review order that was challenged in court. The Supreme Court’s November ruling remanded the review petition to MERC and directed the regulator to decide the matter within 12 weeks, while the interim position is that current tariffs remain applicable. Local reports confirm the remand and note that the Bombay High Court’s directions will continue to operate until MERC issues a fresh order.

What happened legally and administratively

MERC originally issued the MYT order in March 2025 and passed a review order in June 2025; the review process and its implementation became the subject of multiple writ petitions and litigation before the Bombay High Court and the Supreme Court. The apex court’s remand emphasizes full stakeholder hearings before any change is finalized, effectively pausing unilateral implementation of contested provisions.

Immediate impact on developers

• Revenue certainty paused: Developers of renewable projects face short‑term uncertainty because the contested MYT provisions affected how excess generation, banking, and compensation were treated; the 12‑week timeline gives MERC a window to re‑examine those rules with stakeholder input.

• Project economics under review: Provisions that restrict banking or alter compensation can materially affect merchant and PPA‑backed solar and wind projects; developers will watch MERC’s consultations closely for signals on banking, scheduling, and compensation mechanisms.

• Investment timelines may slow as financiers and EPC contractors seek clarity before committing to new capacity in Maharashtra.

Impact on consumers and the distribution sector

• Existing tariffs continue, so consumers will not see immediate bill changes while the matter is decided.

• For the distribution company (MSEDCL), the remand means a potential re‑run of revenue requirement calculations and cross‑subsidy adjustments, which could affect future tariff petitions and subsidy flows.

• The court’s insistence on stakeholder hearings increases transparency but may extend regulatory timelines for tariff rationalization.

Implications for storage and renewable integration

• Battery storage economics are sensitive to tariff design, banking rules, and compensation for injected energy; any MERC decision that tightens or loosens banking will change the value proposition for co‑located storage and grid‑scale batteries.

• A stakeholder‑driven rework could either accelerate storage adoption (if favorable dispatch/compensation rules emerge) or delay projects if uncertainty persists through the review window.

What to watch next

• MERC’s consultation schedule and draft orders; transparent stakeholder hearings will be decisive.

• Whether MERC restores, modifies, or replaces the contested review provisions — and how it treats banking, compensation, and scheduling for renewables and storage.

The Supreme Court’s 12‑week remand forces a careful, consultative regulatory reset in Maharashtra that preserves short‑term tariff stability but creates a pivotal moment for developers, consumers, and the state’s storage and renewable roadmap.

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Renewable Energy Society of India (RESI) Journal — Title: Renewable Energy Chronicles: The Power Saga (ISBN: 978‑81‑993949‑6‑4)