Power board, MERC on collision course

MUMBAI: The Maharashtra State Electricity Board (MSEB) is headed for a battle royale with the Maharashtra Electricity Regulatory Commission (MERC).
After challenging the regulator’s tariff order of January 2002, the power board seems to be in a mood to challenge its subsequent tariff order as well.
According to the MSEB, the MERC order is unjust as it does not consider the power board’s requirements sympathetically.While the MSEB had asked for a 12.5 per cent tariff hike, which would have helped it net Rs 1,462 crore, the regulator granted only a Rs 1.5 per cent hike, amounting to Rs 186 crore.
The MERC order, applicable to consumers northwards of Bhandup in Mumbai and the entire state outside Mumbai, is aimed at rationalising tariffs towards the larger end of wiping out cross-subsidisation of large sections of consumers.
However, the MSEB argues that in the process, the order has only increased tariffs traditionally subsidised categories like agriculture and lower slabs of domestic users, while reducing it for the paying categories.
For instance, the MSEB’s domestic consumers using between 31 and 300 units of power per month are paying 45 paise more per unit from December 1. Besides, their fixed charge has gone up by Rs 10.At the same time, those consuming over 300 units are paying Rs 10 more as demand charge but Rs 0.75 paise less per unit.
Though MERC has only issued the operative part of the order, the MSEB has already dashed off a letter seeking clarifications and criticising several decisions in that order. While MERC is still to reply to the letter, a senior MSEB official said the power board was waiting for the detailed order and might move court.
According to the MSEB, the regulator has come up with unviable proposals. Contending that MERC has “subjected the liquidity position of the board to a severe shock’’, the letter by MSEB chairperson Asoke Basak on January 12 says MERC has not provided the MSEB “a reasonable recovery of the cost of electricity’’.
Mr Basak has complained that on the principle of tariff rationalisation, the commission has reduced the tariff for most high-tension electricity consumers and reduced revenue from the higher slabs of users by Rs 214 crore per annum. He has claimed that the MSEB’s HT tariffs are lower than that in the neighbouring states.
Responding to MERC’s observation that the MSEB had to be given oxygen for its survival, Mr Basak said, “The supposed oxygen availability has been curtailed to a very large extent by this anomaly in tariff rationalisation.’’