Maharashtra Electricity Regulatory Commission (MERC) has closed for order the appeal filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) against adverse ruling in the multi-year tariff (MYT) case. The Commission wrapped up the hearing on Friday, directing Discom to submit its detailed argument as to claim of errors in calculation of annual returns and other aspect outlined in the multi-year tariff petition. The review petition is unusual, as MSEDCL, for the first time, chose the option. Normally, the entire process of MYT order comes after detailed hearing and consideration of all aspects.

 

The Commission conducted two hearings, one on May 6 and other on May 9. However, despite pleading by intervenor, particularly R K Goenka, energy expert and representative of Maharashtra Steel Manufacturers Association, Commission did not lift the existing stay on the March 28 tariff order. Goenka said as an intervenor, he had right to get review petition copy. However, during the hearing, the lawyer for Discom opposed the demand for petition copy, contending that there is no rule to provide the same since it is not a new but a review petition. But Goenka said, unless he has copy of petition, how can he, as intervenor, shape the reply and counter MSEDCL’s claims. But the Commission comprising Chairman Sanjay Kumar, and members Anand Limaye and Surendra Biyani asked MSEDCL to submit all the point in details as to their claims of miscalculation, errors in records within next three days. Till then, the Commissioner has already averred the existing stay on the MYT order of March 28, 2025, which will continue to operate. Goenka said the ball is now in Commission’s court and it will have to determine whether the submissions of MSEDCL are true and to what extent they can be granted relief.

 

Further in case MSEDCL say is partly allowed, then MERC would also have to finalise the way through which additional recovery can be provided. Meaning, whether the tariff that was lowered for consumers would be modified, or the Discom can mop up the required shortfall in revenue through short term measure or through mode of fuel adjustment (FAC) charge. Last time, Commission had permitted MSEDCL to recover the shortfall in the projected revenue through FAC for a limited period of three months. Goenka further feels that even if MSEDCL’s contention is to be accepted, then Commission could have revised tariff during final true-up of accounts of MSEDCL, instead of tinkering with the current MYT order. The Discom has several other avenues open to approach MERC in case they experience major shortfall in revenue that the one projected in MYT order.

 

But at the same time, the intervenor knows that review is limited to only one or two points as entire MYT order cannot be part of appeal. The major contention of MSEDCL revolves around the Capex allowance wherein Commission has underlined that former is likely to turn surplus at end of 5th Control Period due to savings in power purchase, significant reduction in energy quantum requirement and most importantly modification in sales to agriculture sector is based on Feeder input based methodology. Therefore, savings in projected O&M expenses in line with regulatory norms led to inference of need for lower Capex and capitalisation expense. The same was in line with Capex guidelines and regulatory norms. MERC order is expected only by next week as post submission in writing all the objections and its own calculation as to Capex by MSEDCL, the new tariff to be paid by consumers will be known.