MAHARASHTRA Electricity Regulatory Commission (MERC) while adjudicating the multi-year-tariff petition of Maharashtra State Electricity Distribution Company Limited (MSEDCL) has advised Maharashtra Government to consider formation of new company for agriculture consumers. The directive, though not binding, comes against the backdrop of a demand from the industry, which is bearing the brunt of cross subsidy as MSEDCL claims losses in supply of power to agriculture consumers. However, the stance of MERC is also due to dispute over agricultural sales figures as MSEDCL claims fell apart when an independent audit was carried out a few years ago. The Working Group was formed by MERC after consumer activists pointed out glaring inconsistencies in the agriculture sales figures. Reasoning its order, MERC’s full bench of Chairperson Sanjay Kumar, members I M Bohari and Mukesh Khullar, batted for maintaining cross subsidy among different categories of consumers.

 

The industry is crying foul as it has to cough up higher tariff for the loss sustained by MSEDCL in its agriculture sales. Similarly, the regulatory body also called for undertaking a review of agricultural tariff design on the basis of cropping pattern, land area coverage, geographic diversity. This is in addition to connecting load and agriculture pump set capacity. A plain read of the directives gives an indication that during next control period, MSEDCL might bring in sub-categories among agriculture consumers in a bid to provide level playing field so as to ensure that itslosses are trimmed. Thismeans, those with large landholdings might have to payhigher rate as MSEDCL is askedto work out a formula for rationalisation of tariff. Some concrete formula will emerge aftera detailed study and consultation with all stakeholders. About the separate company, MERC noted that this mayenable proper monitoring, andaccountability can be fixed incase of any anomaly. The twoseparate organisations, one foragriculture and one for rest of the consumers, would providebetter monetary returns toMSEDCL. Efforts in that direction should be expedited, itstated. In the last few years, MSEDCL finds itself on a sticky wicket in justifying higher sales figure in agriculture sector, evenin the time of recession andlarge scale adverse weatherconditions.

 

The Commissionpulled-up MSEDCL for not adhering to its directions as tocomputation of agriculturesales figures, even as it accepted the company contention of large scale challenges in individual metering. In fact in MYT order of 2020, MERC had adopted feederbased sampling methodology, which was quite effective inarriving at correct figures of consumption. The outcome of results and methodologyfinalised through this exerciseshall form the basis for approval of AG sales from FY 2019-20onwards, during truing up exercise to be carried out at timeof MTR. Despite this ruling, theCommission noted that MSEDCL did not follow the methodology specified by theCommission while estimating