State power generation firm accuses regulator of bias | mumbai | Hindustan Times
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State power generation firm accuses regulator of bias

Accusing the Maharashtra Electricity Regulatory Commission (MERC) of bias, the state-owned power generation company, Mahagenco, claimed that the commission's tariff orders and other directives have caused it massive losses in the past five years.

mumbai Updated: May 15, 2011 01:12 IST
Dharmendra Jore

Accusing the Maharashtra Electricity Regulatory Commission (MERC) of bias, the state-owned power generation company, Mahagenco, claimed that the commission's tariff orders and other directives have caused it massive losses in the past five years.

“The commission was impractical while passing orders because it determined tariff on the basis of wrong guidelines and assumptions,” Mahagenco said in a response to the Comptroller and Audit General’s adverse remarks in its report that was tabled in the recent budget session of the state legislature.

MERC chairman VP Raja, who came under attack in the budget session too, was unavailable for comment.
Mahagenco, which gives its entire power to state’s distribution arm Mahavitaran, clarified that its rates were the lowest in Maharashtra.

“We are a state-run social enterprise that strives hard to provide cheap power. But, some people are making a systematic effort to force distribution companies to buy expensive power [from private generators],” said a company statement uploaded on its official website on Friday.

This statement, in particular, is seen as a veiled attack on the MERC that recently ordered Reliance Infrastructure to buy expensive power from a private generator even as the company had tied up for less expensive supply.
Mahagenco claimed that accounting errors committed by MERC in its tariff order widened the gap between expenditure and profit. As this Rs1,968 crore did not reflect in the company accounts, it invited the Comptroller and Audit General’s wrath.

Mahagenco said it was able to recover differences when it put up their case before the appellate tribunal of electricity.

“We have won almost all appeals against the MERC orders, but the legal process took a couple of years. We will recover the deficit within next three months,” said an official from Mahagenco, requesting anonymity.