State-run power companies MSEDCL, MSETCL and Mahagenco have challenged MERC's power tariff orders in the past many times and by and large have got favourable decisions.
Consumers have, however, taken strong exception to this trend as they do not get a chance to present their side in the tribunal.
The MSEDCL had sought a power tariff hike of 14% for 2010-11. However, MERC sanctioned a tariff hike of only 3.03%. The commission has asked MSEDCL to reduce costly power purchase purchase by 1,677 million units (MUs). Mahagenco has been asked to increase generation to acceptable levels to cover up the deficit. As a result, the average power purchase rate has been reduced from .'4.87 per unit proposed by MSEDCL to .'4.38 per unit thereby reducing the proposed tariff hike. MERC has also considered distribution loss for 2010-11 as 17.20% against 19.98% proposed by MSEDCL. This has also reduced the quantum of power purchase allowed to MSEDCL.
The MSEDCL officer said that due to reduction in power purchase quantum the company would have to increase loadshedding. "The commission seems to be oblivious to the fact that age of most Mahagenco units is more than 25 years. It is only because of power shortage that they are still being run."
Another point of contention is sharp reduction in capital expenses and capitalisation. MSEDCL had proposed capitalisation of .'4,586.19 crore for 2010-11 but MERC has allowed only .'876.51 crore.
The amount was to be spent on infrastructure plans, agriculture feeder separation, fixed capacitor scheme, accelerated power development and reform programme (APDRP), distribution transformer metering, etc. MERC, however, stated in the order that unless the benefits of these investments were not established by MSEDCL it would not allow the entire amount.
Source- Times of india