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Legal issues delay MERC's move on DPC

The legal issues involved in the Dhabol Power Company controversy are expected to delay the Maharashtra Electricity Regulatory Commission's initiative on fixing tariff for the electricity that may be produced by the power project.

A senior member of MERC, told UNI in Mumbai on Tuesday that the MERC was analysing all the legal and technical aspects of the Maharashtra State Electricity Board's draft proposal submitted before the Commission last week on fixing a tariff for power produced by DPC.

He said such studies were necessary before initiating a settlement process on the power project's tariff.

He said that MSEB, in its proposal, had stated that the DPC plant was under the possession of a court receiver who was appointed by Bombay high court on the request of Industrial Development Bank of India.

IDBI is the lead financial institution, which heads the consortium of Indian lenders who have invested Rs 6,200 crore (Rs 62 billion) in the Rs 13,000-crore (Rs 130-billion) DPC power project.

Citing another reason for the delay in initiating the tariff fixation process, the senior MERC member said Bombay high court had recently given its verdict that the MERC had the jurisdiction for hearing the DPC issue.

The court gave the order on the petition filed by DPC challenging MERC's jurisdiction on hearing the cases.

Though the court had given a certain time to Dabhol Power for approaching the Supreme Court, DPC was yet to take any such step.

The senior member said the final decision on the issue might take some more time if the DPC decided to approach the apex court.

Apart from the legal angle, MERC was analysing the technical issues involved in the project.

The MERC member said the MSEB in its proposal mentioned that it could buy 50 per cent of the electricity generated from the first phase of DPC at the rate of Rs 2.25 per unit.

However, IDBI had argued that the per unit tariff of the DPC should be Rs 2.71 and MSEB should take more than 70 per cent of the electricity produced.

According to the norm, IDBI, MSEB and DPC or a new buyer can come to a settlement on the project only after MERC gives a green signal on the tariff of the electricity.

''And the tariff should be viable not only for MSEB but should be affordable for the consumers too'', the member said.

UNI

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