It is the era of the electricity regulatory commissions. Such bodies are a fact of life in Orissa, Haryana, Andhra Pradesh, Karnataka and Uttar Pradesh.
The setting up of these bodies is a tacit acknowledgment that the political pricing of electricity cannot continue.
The Maharashtra Electricity Regulatory Commission (MERC)has completed two years on August 5,2001.
Today, the case filed by the Dabhol Power Company (DPC) challenging the jurisdiction of MERC in the Supreme Court is also coming up for hearing. MERC chairman P Subrahmanyam takes time off to answer these and related questions in an interview with S Ravindran.
What have been the achievements of MERC in the last two years?
Although the commission was constituted in August 5,1999, it started functioning only in September that year with a minuscule staff of 5.
One of the first tasks before the commission was fixing the tariff to be charged by the Maharashtra State Electricity Board. This was a gigantic task and entailed public hearings in Aurangabad, Amravati, Nagpur, Nashik, Pune and Mumbai.
This order was delivered on May 5, 2000 and has set a trend for determining retail tariff for consumers. Many international agencies termed it a path-breaking order and similar principles have been adopted by other regulatory commissions in India.
The commission has so far delivered 27 orders and in all the cases we have tried to uphold the principle of transparency.
Where do you think that you have gone wrong?
The regulatory process is a new concept in the Indian power sector and public awareness is being created. Institutional memory for such regulatory bodies in the Indian context is quite low.
Consequently, there is a tendency to copy the US regulatory framework which may not be relevant to the Indian socio-economic context.
MERC seems to have very little teeth compared with other regulatory commissions. Are you seeking more powers?
The state government has granted us powers in such a manner that today we are only a tariff-fixation body in a progressive state. The commission has already written to the state government seeking additional powers.
The Godbole committee in its second report has clearly emphasised the need to strengthen organisations like MERC, dealing in a complicated area like electricity.
MERC finds itself embroiled in the Dabhol controversy, a situation which is not of its own making. Your comments. Do you think that you have the power to adjudicate on various issues between MSEB and DPC?
At the outset, let me make it clear that MERC is a quasi-judicial body set up under an Act of Parliament. The genesis of the MERC also lies in the Bombay High Court's directive.
Therefore, it is wrong to say that we have found ourselves embroiled in the Dabhol controversy.
The fact is that MSEB filed a proposal for adjudication of disputes regarding alleged violation of operating characteristics and dynamic parameters by DPC under the power purchase agreement.
The commission delivered its interim order staying operation of clause relating to arbitration proceedings and escrow agreement and accounts. DPC appealed to the high court which directed it to go back to MERC.
However, DPC preferred to appeal against the judgement to the Supreme Court. Since the matter is sub -judice it would not be appropriate for me to comment on whether the commission has any jurisdiction to adjudicate on the various issues between DPC and MSEB.
Where do you think the commission is headed from here?
Given the right kind of support and inputs regulatory commissions in this country can bring a sea-change in the electricity sector which has been dogged by years of indifference, inefficient and irrational activity.
