Power discom's tariff hike proposal draws flak

Pune-based think tank Prayas, which works in the field of energy-related issues, has objected to state-owned power distribution company Mahavitaran's move to include the cost of the interest payment on loans given to the erstwhile Maharashtra State Electricity Board (MSEB) by the state government in its Annual Revenue Requirement (ARR).

The process to divide the assets and liabilities of the MSEB into generation, transmission and distribution companies is still on.

A report published by Prayas on Mahavitaran's ARR document for 2008-09, submitted to power regulator Maharashtra Electricity Regulatory Commission (MERC) points out that Maharashtra State Electricity Distribution Company Ltd (MSEDCL), or Mahavitaran, has propsed a 31.8 per cent tariff hike across the board except for agriculture and the below-poverty-line domestic consumers.

The total quantum of this tariff hike is around Rs 5,452 crore. Of this, Mahavitaran will spend nearly 40 per cent towards paying interest to the MSEB. However, the report points out that it is against the provisions of the Electricity Act, 2003.