Vidarbha Industries Association (VIA) has challenged the recent steep tariff hike approved by Maharashtra Electricity Regulatory Commission (MERC). The power regulator had taken suo motu cognizance of MSEDCL's inability to clear the bills of Mahagenco and Mahatransco and levied five extra surcharges on consumers in addition to the regular fuel surcharge. The order issued on September 9 increased the power tariff by 20% for all consumers. MERC also allowed MSEDCL to recover as much fuel surcharge as it wanted without any vetting by the Commission.
This is the first time in the history of MERC that it increased power tariff suo moto. It did not inform even its 22 designated consumer representatives. The decision to allow a distribution company to levy fuel surcharge as it pleases too is unprecedented.
VIA contended that the Commission had violated Section 64 of Electricity Act which states that tariff order can only be increased after considering all suggestions and objections received from the public. By not providing an opportunity to consumers to present their view point MERC had ignored the principles of natural justice.
The appellant has pointed out that the Commission on April 30, 2013, had rejected MSEDCL's application to increase tariff on interim basis without giving consumers a chance to voice their opinion. This is mentioned in the September 9. According to VIA, MERC has violated its own principle.
VIA has also challenged MSEDCL's claim that the tariff had increased by 10% and stressed the hike was around 20%. It has also claimed that MERC's contention that if tariff was not hiked now it would lead to abrupt and very high increase in tariff in future, was not correct.
As per the petition, MERC's permission to allow MSEDCL to recover variation in energy charge component of generation stations from consumers without its permission would perpetually violate Section 64 of the Act.
If this amount is made recoverable through fuel surcharge, then MERC was abdicating its responsibility mandated under Section 86 (1) of the Act. This Section says that the commission's job was to regulate electricity purchase of distribution licensees including the price at which electricity is purchased from generating companies.