In a move that will bring down the monthly power bills of around 10 lakh consumers, the appellate tribunal for electricity (ATE) has scrapped the state regulator’s order that allowed the Brihanmumbai Electric Supply and Transport (BEST) to subsidize its loss-making transport wing by charging more from its power consumers.
In its verdict on Friday, an ATE bench of chairman justice M Karpaga Vinayagam and member Rakesh Nath said the Supreme Court’s order in February 2011, which referred to certain provisions of the Electricity Act, was interpreted improperly by the Maharashtra Electricity Regulatory Commission (MERC).
The Indian Hotels Company Ltd and Piem Hotels Limited had filed an appeal against BEST with the tribunal last year.
“The Supreme Court had not given directions to allow the BEST to load the entire deficit of its transport business on the distribution business and consequently on the retail supply tariff for electricity charges from its consumers, as sought to be claimed by the BEST,” said ATE.
“This means the consumers will not pay the surcharge that is calculated according to the consumption pattern in their monthly bills. The consumers may get their money refunded with interest, if the Supreme Court does not stay the tribunal’s order. The minimum surcharge for each unit is 55 paisa/unit,” energy expert Ashok Pendse said.
Insiders in BEST said the undertaking plans to challenge the order in the Supreme Court. The MERC had allowed BEST to recover Rs 1,187.71 crore between 2012 and 2016.
This brings the recovery from all consumers to approximately Rs 60 crore a month. According an MERC order, BEST made a huge loss of Rs 3,308 crore between 2003 and 04 and 2011-12.
* The issue
Around 10 lakh electricity consumers of BEST up to Mahim and Sion, who form barely 25% of the total transport division consumers, bear the brunt of the transport deficit loss recovery (TDLR), which is about Rs 60 crore a month.
According to BEST, section 42 (3) and section 51 of the Electricity Act, 2003, allows it to subsidize its loss-making transport wing.
However, the appellate tribunal for electricity claims the state regulator was wrong in interpreting the Supreme Court order and wants such recovery scrapped.
BEST may challenge the order and if it loses there as well, the consumers may get refund and will not pay TDLR in future.