BEST objects to new tariff model

Committee members of the Brihanmumbai Electric Supply and Transport (BEST) have opposed the multi-year tariff (MYT) proposed by the Maharashtra Electricity Regulatory Commission (MERC).

Committee members of the Brihanmumbai Electric Supply and Transport (BEST) have opposed the multi-year tariff (MYT) proposed by the Maharashtra Electricity Regulatory Commission (MERC).

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Committee members will meet chief minister Prithviraj Chavan and energy minister Ajit Pawar to discuss the matter soon, said Sunil Shinde, BEST chairman.

According to the new regulation, mandated under the Electricity Act 2003, electricity distributors have to submit a five-year business plan that projects the estimate costs, revenue and other factors that impact their tariff. Currently, distributors are only required to submit a one-year plan.

Moreover, tariffs will be allowed to change only in a pre-determined manner over five years. Presently, the MERC determines the tariff every financial year. “The five-year business plan calls for a review only after two-and-a-half years, which is too long a time. We want annual reviews,” said Atul Patil, deputy general manager (electric supply), BEST. “We had informed MERC about our objections but they went ahead with the regulation.”

MERC said that the MYT will help reduce tariff in the long term. The BEST, which supplies power to 10 lakh consumers in the island city, fears that the new regulation will impact their revenues. “I’m afraid we might be saddled with huge losses and may even face dissolution,” said OP Gupta, general manager, BEST. Gupta said he wrote a letter to Pawar in which he said that the undertaking would move court if MERC did not reconsider the regulation. Patil added, “We will provide fair projections in our plan but if they vary in future we can’t be held responsible.”