TRA to decide on state power tariffs, subsidies

MUMBAI, MAR 1: Power tariff in Maharashtra will become less politicised and more rational with the establishment of the Tariff Regulatory...

MUMBAI, MAR 1: Power tariff in Maharashtra will become less politicised and more rational with the establishment of the Tariff Regulatory Authority TRA. A statutory body, the TRA will decide on tariffs and subsidies for all sectors of consumers. The state government has conveyed its decision to the Centre to set up the TRA before March 31.

The TRA will be a three-member authority with experts from the power-energy sector and a retired High Court judge or a person of eminence. A Search Committee has shortlisted six names from which the state government will decide on three. The notification on TRA is expected shortly.

TRA8217;s decisions on tariffs will be binding on the state government though the cabinet will have to put its seal of approval on them, highly placed sources said. 8220;The TRA8217;s directives will be practically mandatory on the government,8221; sources added.

The establishment of an authority like the TRA means that the state government and ruling political parties will have a minimal role in thedecision-making process as against the sweeping powers it now exercises over power tariffs, concessions and subsidies. Under the existing process, the government along with the Maharashtra State Electricity Board MSEB takes the decisions.

Under the new system, the government will be one of the many parties heard by the TRA. The MSEB and other state and private companies that generate power will have their case heard. However, the most significant change is that consumers will also have a say. The TRA will hear depositions from consumer organisations representing all categories of power consumers.The TRA system will give the state 8220;the best chance to rationalise its power tariffs and avoid political pressures in the decision-making process,8221; sources said. The alliance partners Shiv Sena and BJP were locked in a battle of wits for nearly five months on the issue of providing free power to farmers.

The BJP, represented by Deputy Chief Minister Gopinath Munde who holds the power portfolio, had resolutelyopposed Sena chief Bal Thackeray8217;s unilateral announcement to provide free power. The issue was sorted out recently with the Sena agreeing to limit the free power to small and marginal farmers only but power tariffs in the agricultural sector have been a vexed issue for years.

Setting up the TRA will help because it is an independent authority that has the liberty to take the 8220;factual position8221; of the cost of power generation into account, give due emphasis to both energy and financial accounting to fix tariffs, government sources said. The existing process of government decision-making is susceptible to several political pressures and lobbying.If the TRA is set up before March 31, the state government becomes eligible for power sector finance at concessional rates from the Centre. This was a factor in the government decision too, sources said.