Stakeholders Demand Rejection of MSEDCL Tariff Review Petition at MERC Hearing
In a significant development, multiple speakers at a public hearing on Tuesday vehemently urged the Maharashtra Electricity Regulatory Commission (MERC) to reject the Maharashtra State Electricity Distribution Company Ltd's (MSEDCL) review petition concerning its multi-year tariff (MYT) structure. The hearing, which marked the third such gathering on this contentious issue within the past year, witnessed active participation from approximately thirty power experts, consumer representatives, and industry voices, all united in their opposition to the proposed tariff revisions.
Industry and Employment at Risk Due to High Power Costs
Congress spokesperson Atul Londhe highlighted the severe adverse impact of elevated electricity tariffs on Maharashtra's industrial sector, with micro, small, and medium enterprises (MSMEs) bearing the brunt of the financial strain. He emphasized that escalating power costs are crippling small units, making it increasingly difficult for them to sustain operations, service existing loans, and maintain profitability. Londhe warned that many of these enterprises now face imminent closure risks, which would further exacerbate unemployment and stifle economic growth across the state.
Londhe called upon both the government and regulatory authorities to conduct a comprehensive review of the current tariff framework. He pointed out that electricity rates in Maharashtra are conspicuously higher compared to other states, and this disparity extends beyond industrial concerns, negatively affecting employment generation and broader economic activity. Immediate corrective measures are essential to safeguard small businesses and preserve jobs, he asserted.
Legal and Procedural Irregularities Flagged by Experts
Power expert and former independent director of MSEB Holding Company, RB Goenka, representing the Vidarbha Industries Association (VIA), launched a strong critique of the procedural aspects surrounding the tariff review. Goenka noted that earlier practices involved discussing tariff petitions with consumer representatives prior to public disclosure, but this collaborative approach has since been discontinued, reducing transparency.
Goenka further contended that the High Court had already deemed MSEDCL's review petition illegal, as it does not align with the provisions typically governing such petitions. Despite this judicial stance, MERC proceeded to admit the petition and continue the hearing process. Goenka indicated that even if the commission issues an order, the legal dispute will persist, with plans to escalate the matter to the Appellate Tribunal.
Addressing the interim tariff applicability, Goenka referenced a High Court order that quashed MERC's directive but stayed its own ruling for four weeks. According to his interpretation, the tariff order from March 28, 2025, should have taken effect after this period expired on December 3. However, confusion reigns regarding which tariff structure currently applies to consumers.
Goenka alleged that a comparative analysis between the March 2025 and June 2025 orders reveals a substantial tariff increase ranging from 25% to 30%. He accused MSEDCL of violating a Supreme Court directive that upheld the High Court's para 48 order, prompting the filing of a contempt petition against the distribution company. The Supreme Court had allotted twelve weeks for the commission to decide on the petition, a deadline that lapsed on February 9, leaving uncertainty over whether any forthcoming order will be applied retrospectively.
Additional Expert Testimonies and Consumer Discontent
Power expert Sudhir Budhay also advocated for the rejection of MSEDCL's review petition, labeling it as premature and lacking empirical support. Budhay cautioned that imposing grid support charges before reaching the 5,000 MW threshold would be unjustified. He further warned that restricting renewable energy banking could detrimentally affect existing solar projects and investors, ultimately harming consumer interests and undermining regulatory stability.
Expressing profound disappointment, power consumer Mahendra Jichkar lamented the perceived ineffectiveness of previous hearings. Jichkar observed that numerous experts and consumers dedicate significant time to attend these sessions, hoping their inputs will be meaningfully incorporated into regulatory decisions. However, he alleged that MERC often fails to adequately consider these submissions, eroding public trust in the process.
Jichkar specifically referenced the March 2025 tariff order, which initially received widespread approval but was abruptly stayed within an hour of the hearing, denying interveners a fair opportunity to present their cases before a new order was issued. He also questioned the legitimacy of allowing truing-up petitions after finalizing a five-year MYT, arguing that consumers invariably end up shouldering the burden of increased tariffs.
Unified Opposition to Tariff Hike and Calls for Transparency
The hearing culminated in a strong, unified opposition to MSEDCL's review petition, with diverse stakeholders raising alarms over several critical issues:
- Escalating electricity costs that threaten industrial viability and employment.
- Legal ambiguities and alleged violations of court orders.
- Insufficient transparency and stakeholder consultation in tariff determination processes.
- The urgent need for regulatory certainty to protect consumer interests and foster economic stability.
As the debate intensifies, all eyes remain on MERC's forthcoming decision, which will significantly influence Maharashtra's power sector dynamics and economic landscape.
