Discom writes again to power regulator

Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has moved a petition before the Maharashtra Electricity Regulatory Commission (MERC) asking the commission to allow the discom to recover the cost incurred on buying costly power as per the commission?s directives.

This is a third letter written by MSEDCL to MERC which is being hurt after MERC's order on April 23 which rejected MSEDCL's plea to increase load shedding.

While rejecting the MSEDCL's plea, power regulator, criticised MSEDCL's functioning and this is seen as a virtual indictment of the state-owned power utility. Ever since, volleys of letters have been being fired by MSEDCL at the power regulator asking them to clarify on the various aspects of its order.

In its April 23 order, power regulator had asked the MSEDCL to buy as much of costly power as possible to reduce the load-shedding hours. In a petition moved by discom's Managing Director A B Pandey, it has attempted to point out the discrepancies in MERC's order and tried to point out that if the discom tries to implement MERC's order then it will go bankrupt.

Pointing out that though the approved rate of buying costly power by MERC from the market is only Rs 5.36 unit, at the present market prices, rates vary between Rs 7 and Rs 8 per unit, Pandey said.

So even if the discom restricts itself to buying the 400 million units (MUs) of costly power, a quantum approved by the power regulator, in that scenario also, MSEDCL will incur the losses of Rs 125 crore per month. If it buys additional 330 MU of power available in the market, its losses will go up to Rs 379 crore.

This is financially unsustainable for the discom. So, the power regulator should pass suitable order removing restriction on buying costly power and allow discom to recover incremental additional supply charges (ASC).

The ASC is a mechanism devised by power regulator to enable the discom recover the additional cost it incurs on purchasing costly power.

Lesser amount of power cuts in a particular area means higher ASC for the consumers in that particular area which they pay for assured power supply.