Merc stops BEST from levying surcharge on power consumers

Mumbai: The state electricity regulatory commission on Friday disallowed BEST Undertaking from bridging losses of its transport division by levying a surcharge on its power consumers in the island city.
Following BEST’s petition in August 2012, the Maharashtra Electricity Regulatory Commission (Merc) had in December 2012 permitted transport business deficit to the extent of Rs 1,187.71 crore for 2004-05 to 2008-09 to be recovered from BEST’s electricity consumers during the multi-year tariff (MYT) control period from 2013-14 to 2015-16.
But Merc’s order was set aside by the appellate tribunal for electricity (Aptel) on October 2014, after it was challenged by the Indian Hotels Co Ltd (IHCL) and PIEM Hotels Ltd (PHL). Aptel had ruled, “If BEST’s contention is entertained, it will result in passing on the entire loss of its transport business, including its inefficiency, to the electricity distribution business, and ultimately to the end consumers of electricity against their interests, which are to be safeguarded by the state commission under Section 61 (d) of the Electricity Act 2003.” While passing the order, Aptel had told Merc to review its order of allowing cross-subsidy losses by imposing transport division loss recovery (TDLR) charges on power consumers.
But BEST challenged Aptel’s order in the civil suit it filed in the Supreme Court. It claimed that BEST, being a local body authority, should be allowed to cross-subside the losses. The appeal is pending in the SC, which has so far refused to stay Aptel’s order.
Following Aptel’s directive, Merc members Deepak Lad and Azeez Khan ruled on April 20, “The commission disallows the amount of transport deficit amounting to Rs 1,187.71 crore in 2004-05 to 2008-09, which had been allowed by the commission in its original order on December 26, 2012. This shall be subject to further orders of the SC in civil appeal No 10488 of 2014.”
BEST general manager Jagdish Patil said, “We have already moved the SC, whose directives are awaited.”
Congress corporator and BEST committee member Ravi Raja said, “It is victory for us as we have been protesting against BEST’s policy of burdening power consumer in the island city for losses of the transport division.”
Guruprasad Shetty, spokesperson of the Indian Hotel and Restaurant Association (Ahar), which has been fighting BEST on the TDLR issue said, “If the SC rules against BEST, consumers will have to be refunded the amount that it has collected in the form of TDLR.”