Hearing on suit against BSES today

The Maharashtra Electricity Regulatory Commission (MERC) will hear on Tuesday a petition filed by the Tata Power Company (TPC) against the Reliance group-promoted BSES undertaking for offering 'rebates' and 'discounts' to various consumers.

TPC has sought relief from the MERC on the ground that under the Electricity Regulation Commission's (ERC) Act, fixation and determination of tariff is no longer left to the licensee.

During the last hearing conducted by MERC on July 25, 2003, the counsel for TPC had said: "It is to be fixed by the MERC, which has the exclusive jurisdiction to fix the tariff and unlike the (earlier) mechanism of the schedule VI of the Electricity (supply) Act, it is no longer a ceiling but a particular figure."

The TPC counsel pointed out to the MERC that BSES admittedly started offering rebates to various consumers from October 1999.

"In its written submission, BSES told the MERC that they were compelled to offer such rebates to consumers as TPC was poaching BSES consumers, and rebates were the only way to meet such unfair competition," TPC's counsel said.

TPC had cited instances of BSES addressing a letter dated May 22, 2000, to the Goregaon Sports Club (located in a northern Mumbai suburb) "where BSES have stated that the fuel adjustment charges would be lower than that of TPC...BSES

had also agreed that they would supply power to the Western Railways (A TPC consumer) at any rate that would be lower than the tariffs charged by TPC".

TPC's counsel pointed out that while BSES has tried to present these actions as being in furtherance of competition, the basic issue pertains to a statutory regime that requires the approval to tariff rate, which is not open to any licensee to ascribe to itself such powers since the coming into force of the ERC Act in 1998.

Tuesday's MERC hearing on the issue is crucial to both the BSES as well as TPC as their respective tariff revision proposal's will soon have to be ratified by the MERC.

While BSES has already submitted its TRP to the MERC a week back, TPC is expected to do so on Wednesday.