Regulation commission to study MSEB’s working

The MERC has invited opinion from public, industry associations and other interested parties on the MSEB proposal. As MSEB’s move is set to hit all power consumers, the MERC, for the first time in state’s history, will conduct public hearing on MSEB’s proposal.

Addressing a news conference, Subrahmanyam said the commission will take a decision only after hearing all the parties, including public bodies. The public hearing will take place in Mumbai, Pune, Nashik, Aurangabad, Amrawati and Nagpur in order to get the opinion from all sections of the society, including farmers.

Earlier, the power tariff was decided by the Cabinet without taking the opinion of the user industries and consumers. This has resulted in high subsidies to some sections of the society while industries were charged a very high rate.

The MERC chairman said the new tariff, if cleared by the commission, will come into effect with prospective effect as compared to MSEB’s proposal to hike power tariff from November 1 this year itself. “We are also looking at a deadline of February-end to finish off the entire exercise of tariff revision,” he said.

As reported by this newspaper, the MSEB has submitted a proposal to the quasi-judicial body, MERC for a 10 per cent hike in tariff for politically sensitive agriculture sector, the domestic segment of having consumption of up to 100 units per month and even powerlooms.

The MERC chairman said transparency will be the main thrust of the Commission while fixing tariff for the consumers. “On the basis of evidence available, we would take a decision on MSEB’s proposal,” he said.

With the introduction of public hearing, not only will the MSEB come under public scrutiny but the rate at which it is purchasing power from various sources including Dabhol Power Company will also be made public. Loss-making MSEB is paying high capacity charges to Dabhol Power Company (DPC) which is resulting in an increased outgo from the state electricity board. Hence, the MSEB has proposed a high tariff hike to the MERC.

The Tata Electric Company has already indicated that it would revise its power tariff for Mumbai consumers, if MSEB increases its tariff.

“We cannot look at the PPAs already signed, sealed and delivered by the previous governments but we can certainly look at cost of purchase of power from various sources and compare it,” said Venkat Chary, member of the Commission. However, any PPAs could be opened if anyone proves that it has been fraudulently signed.

The MERC has fixed December 23 as the last date for receiving objections from interested parties. The commission has been constituted under the Electricity Regulatory Commission Act 1998. As per the provisions of the Act, the Commission has been assigned with number of functions including powers to determine electricity tariff in the state. However, there are still some more areas which can be examined by the MERC if it is given the powers stated under Clause 22 (2) the Electricity Regulatory Commission Act 1998. Among others, these primarily relate to its powers regarding issuing licenses to new IPPs and resolving disputes among power companies in the state.