Reliance Energy, Tatas trade charges at MERC hearing

The Maharashtra Electricity Regulatory Board (MERC) on Monday heard the annual revenue requirement (ARR) of Tata Power Company (TPC) submitted before it for ratification.

The commission also heard the submissions of three consumer bodies.

MERC chairman P Subramaniam said, "Reliance Energy, formerly BSES, had a problem with TPC. BSES claimed that TPC had not submitted all the documents sought by it. Many of these objections are already being heard by the MERC in other cases filed before it. Reliance Energy was using estimated figures for this purpose. The hearing was basically pertaining to consumer interests and general statements could well be understood. However, when it was getting into a fight between TPC and BSES, I pointed out that this was a public hearing."

The hearing witnessed presentations being made by the Mill Owners' Association (MOA), the Indian Railways and Prayas, an NGO from Pune.

A Reliance Energy release here said, "The MOA, in its submission, said the ARR included deferred taxes which were to be passed on to the consumer irrespective of whether they would actually be charged at all. It added that the ARR deviated from the accounting standards of the Chartered Accountants of India, specifically AS22, which says the tax liability when deferred is capable of reversal. Therefore the deferred tax liability should not be charged to consumers."

TPC's vice president (business development and strategy) Mohan Gurunath said, "On the issue of differed tax not being an actual outgo, we have actually followed the accounting standards and under AS22, we are required to include this in our ARR." The Indian Railways, in its submission, also referred to the absence of transparency in the fuel adjustment charge. It said TPC had not unbundled its costs of supply.

On tariff reduction by the TPC during the daytime, the Railways said their maximum use of power was during the day. At night it consumed barely 10 per cent of its day consumption, the release said.

Gurunath said, "On the issue of fuel adjustment charge (FAC), we have given that last three years' data, month-wise to the MERC and have provided them all details on how FAC is calculated. If any further details are sought from us we will provide the same. On the charge of unbundling, the fact is that till date we (TPC) remain an integrated utility and therefore maintain our accounts in an integrated manner."