MERC blocks state's power sop

Told to pay MSEB cash

The Maharashtra government's attempts to pass off its free power sop to 23 lakh agriculturists as a book adjustment entry with the Maharashtra State Electricity Board (MSEB) has run into rough weather with the Maharashtra Electricity Regulatory Commission (MERC) that on Thursday directed the state to formally issue orders regarding pending outstandings owed to it by Maharashtra State Electricity Board by September 30 or pay in cash for the shortfall.

The state had had issued a government resolution (GR.) on 8 September stating that Rs 411.62 crore were due to it from Maharashtra State Electricity Board on account of the deductions made by the government from its block loan towards dues owed by MSEB to certain central public sector undertakings (CPSUs).

Thus, the estimated requirement of Rs 395 crores (plus Rs 7.5 crore) owed by the state to MSEB as compensation towards 100 per cent subsidy to agricultural consumers in the 2nd quarter of the current fiscal may be adjusted against the amount of Rs 411.62 crores payable by MSEB to GoM as above, the state contended.

Citing this argument, the MSEB sought permission from the MERC to issue zero energy bills to agricultural consumers for the period from 1st July, 2004 to 30th September, 2004.

However, the MERC noted that of the various dues shown by MSEB as owed to the state government Rs 221.92 crore towards Mula Pravara, Rs 268.82 crore being the difference in electricity duty, Rs 125 crore of lease rent payable for hydro power stations for six months (as against Rs. 85 crore for the full year prevailing so far) were currently under discussion or examination.

In its order issued late on Thursday, Maharashtra Electricity Regulatory Commission has stated that: "Unless the state firms up the quantum of these payments by issuing formal orders prior to electricity bills being issued to agricultural consumers, the scheme of book adjustment proposed by MSEB and GoM cannot be made effective. The amounts that are not finalized as well as adjusted through such formal orders before that date cannot be taken into account while determining the net amount available for adjustment, and GoM shall make cash payments to the extent of the consequent shortfall."