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In a significant intervention that could have long-term implications on the power sector in Maharashtra, the state government requested the Maharashtra Electricity Regulatory Commission (Merc) to “look into Reliance Infrastructure’s tariff structure for consumers in suburban Mumbai and take an appropriate action if there has been an arbitrary and unjustifiable hike in tariff”.

The state government has stayed the revised tariff for the next 15 days. The state wants Merc to complete the probe and take a decision within 15 days from June 25. Under the Electricity Act, the Merc is a quasi-judicial authority with regulatory powers to approve or reject power tariff structures of all licensed energy distributors. Reliance Infrastructure has distribution licence for suburban Mumbai.

A steep hike in tariff, allegedly 262% increase from Rs 1.76 per unit in 2005 to Rs 6.37 per unit in June 2009, in suburban Mumbai where Reliance Infrastructure caters to around 26 lakh consumers has led to violent protests by political parties. The upward revision in tariff is effective from June 1. Political parties, in particular the Shiv Sena, had called for government intervention to roll back the hike.

“There is massive unrest among consumers over the tariff hike. This prompted the government to make a rare intervention,” state energy minister Sunil Tatkare said at a press conference. The minister denied that assembly polls four months later had anything to do with this “rare intervention”.

However, the very fact that the government used its powers for the first time in six years “was self-explanatory”, said Mr Tatkare when asked if the government endorsed the public resentment against the tariff revision. Answering a question, Mr Tatkare said Reliance Infrastructure had the option to move court against this intervention.

“The government is prepared for a legal battle,” the minister said. The state’s decision to approach Merc comes in the wake of Shiv Sena’s agitation against the power utility that turned violent on Wednesday. The Sena activists allegedly attacked the Reliance Infra’s office in suburban Mumbai. It has also appealed to consumers not to pay electricity bills to register their protest against the hike. A Reliance Infra spokesperson declined to comment on the issue.


Source - Times of India