Mumbai, Jan 18: Finally the most feared has happened in the ongoing Enron controversy with the Maharashtra State Electricity Board (MSEB) seeking legal advice to file yet another fresh application for hiking tariffs to offset the heavy financial burden due to Dabhol bills. This follows repeated bail-out exercices sought to the state government every month to pay Enron by invoking funds from the state contingency fund.Confirming the development, a senior counsel of Supreme Court said, "Top bureaucrats had approached me to advice them how to file a fresh application before the Maharashtra Electricity Regulatory Commission (MERC) for another hike for collecting additional revenue in order to bail out the board from the present financial crunch." However, top MSEB officials refused to comment on this issue.It is understood that this time around, it is the state government that has directed the board to check out whether a fresh tariff hike application can be filed before the Commission as it is the only way out to bail out the board."It is a fact that the state government has taken the initiative this time as it is inevitable that every month end the board will appraoch the state government to release funds from the contingency fund which is an alarming trend," added the counsel.Sources added that the government is planning to join this fresh petition as a co-applicant with the demand for increasing the cross-subsidisation, keeping in mind the May 5 order of the Commission. In today's context, the state drains out over Rs 700 crore from the exchequer as subsidy element to power sector alone. This fresh application is to reduce the subsidy part by increasing the tariffs of high tension and commercial consumers. Simultaneously, the state may also demand to reduce the huge tariff hike implemented on small domestic consumers.As per the May 5 order, for small domestic consumers (those consuming less than 100 units per month), agriculturists and powerloom consumers, the tariff had been hiked considerably where in some cases, the hike had been over 500 per cent. The petition plans to the subsidy element has been removed considerably withBut lot depends on the Commission's powers since the Electricity Regulatory Commission Act advocates for reducing the huge cross-subsidisation prevailing in several states. Moreover, the Commission has just submitted its report on the huge tariff hikes implemented by the board in September 1998. This hike was challenged in the Mumbai High Court by an industrial association and the court had directed the Commission to recommend the court on determining rational tariffs.Amidst all these developments, it is quite unlikely that the Commission to admit a petition of this sort which will hike the high tension consumers rates. However, considering the present predicament that the board is facing with dipping revenues, lot depends on the Commission's stance on the issue. For the months of Novmeber and December last year, the revenue recovery by the board has been quite low with an average revenue of Rs 800 crore per month, much lower than previous months, which is why the board had to approach the state to bail out for paying up Dabhol bills.
