Maharashtra is set to constitute a three-member selection committee headed by former Lok Ayukta Justice P S Shah for setting up the state electricity regulatory commission.
The other two members will be P Subramanian, Maharashtra's chief secretary, and D V Khera, member of the Central Electricity Authority (CEA). The Electricity Regulatory Commission Act, 1998, stipulates that the chairperson of the selection panel should be a person who has been a High Court judge and the other members should be the chief secretary and a nominee of the CEA.
The setting up of the SERC has already been delayed. Maharashtra State Electricity Board chairman Asoke Basak had stated in April that the commission would be set up within two months. He had also announced that a Bill would be introduced in the state legislature for setting up the regulatory commission.
Setting up of the SERCs is a part of the agenda agreed to by chief ministers in December 1996. It was originally planned that SERCs would have the last word on tariffs at the state level. And the Central Electricity Regulatory Commission would fix tariffs for power plants located in one state but supplying power to other states.
However, political opposition forced the Centre to back down on the issue of SERCs being the final arbiter of tariffs at the state level. The draft Electricity Regulatory Commission Ordinance stated that subsidies to farmers must be reduced to 50 per cent of the cost per unit within "three years or be borne by the state government". Although this was retained in the Electricity Regulatory Commission Act, a clause was added that said SERCs would be guided by the state government in policy involving the public interest. The Act said the decision of the state government would be final in a dispute between the SERC and the state government over whether any such direction involves the public interest.
This has, in effect, made the state government the final arbiters of state-level tariffs.
The draft Ordinance also envisaged the setting up of SERCs within three months of the constitution of the selection panel. This has, however, been relaxed: the Act has set no time-frame for the constitution of SERCs.
