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Home News Power Sector News MERC orders takeover of distribution co-opetive society,MPECS

MERC orders takeover of distribution co-opetive society,MPECS

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MSEDCLMaharashtra Electricity Regulatory Commission (MERC) has finally hit the final nail the coffin of the Mula Pravara society by allowing MSEDCL to take over the cooperative from February 1. Mula Pravara Electrical Cooperative Society's (MPECS) license area will be merged with MSEDCL's service area. The infamous society's dues to MSEDCL had reached a staggering Rs 2,200 crore.

The development is being perceived as a big blow to agriculture minister Radhakrishna Vikhe-Patil (Congress) whose family runs the society. He has accused deputy chief minister Ajit Pawar (NCP) of settling political scores.

The Shrirampur-based society distributes electricity in 183 villages across five talukas of Ahmednagar district. It purchases power from MSEDCL and supplies it to farmers, most of whom were farmers. Since 1977, it has defaulted on MSEDCL's bills. It also refused to increase power tariff as directed by MERC in 2007. An enquiry conducted on behalf of MERC found that MPECS was simply not collecting bills from its consumers, most of whom are supporters and voters of the Vikhe-Patil family.

MSEDCL had a sought a power distribution license in MPECS service area on the ground of persistent default. It claimed that since MPECS area had large number of subsidised consumers (farmers and lower end domestic) and a lot of paying consumers (industrial and commercial) too, a separate licensee (run by MSEDCL) would not be viable and hence the area should be merged with MSEDCL's area.

MSEDCL has also filed a suit in Shrirampur city civil court to impound the assets of MPECS and prohibit the society from selling them to a third party. The first hearing on this will be held on January 28.

MPECS had also sought to renew its license. However, MERC ruled that while MPECS had sufficient experience and technical capability to distribute electricity, it did not have financial credibility and capacity to do the job.

MERC has directed MPECS directors to hand over the entire power distribution system and associated assets, including offices, land, material and workshops to MSEDCL from zero hours on February 1, 2011. It can file an appeal before the commission to decide the transfer value of the assets.

The society will also have to hand over all data in soft as well as hard format. It will also have to pay the security deposit amount collected from consumers.

MSEDCL sources said that MPECS in all likelihood would file an appeal in Appellate Tribunal of Electricity (ATE) against MERC's order. As Vikhe-Patil's prestige is at stake he would also move the Supreme Court if ATE does not rule in his favour. As soon as MSEDCL filed a petition in MERC against the society it had moved the SC seeking an injunction, which was rejected. This fact notwithstanding, the society would try to buy time, sources said.

The legal battle apart, MSEDCL will have a difficult time taking over the society, which is run by the family of agriculture minister Radhakrishna Vikhe-Patil. During the public hearing on MSEDCL's petition in Shrirampur, the Congress minister and his supporters had threatened to burn down MSEDCL substations in Ahmednagar district if power supply to the society was snapped.

 

 

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