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MSEB to shut power supply to big defaulters

The Maharashtra State Electricity Board has decided to discontinue power supply to the agriculture consumers and powerloom units who are in huge arrears by January 15.

The MSEB chairman Vinay Bansal has written a letter to the state government seeking permission for their proposed discontinuation drive, official sources in MSEB said.

MSEB owes a total Rs 8.22 billion from these two segments of the society who do not pay the electricity bills regularly.

The loss-making MSEB which is passing through a critical stage, has witnessed drastic decline in its revenue earnings in recent months due to poor recovery of dues particularly after the government's directive to the MSEB to provide power at an uneconomic tariff rates of Rs 170 per hp for agricultural and powerloom sectors.

The state government had announced on the floor of the assembly in November that it would offer MSEB power to the consumers in agriculture and powerloom sectors at a lower rate.

This defies the minimum rate of tariff of Rs 300 per hp fixed by the Maharashtra Electricity Regulatory Commission (MERC).

The minimum rates were fixed after the MSEB sought the intervention of state's regulatory body to find out the ways of making revenues for the electricity board. MSEB is running in huge losses of Rs 16.81 billion annually due to non-payment of arrears by the consumers mainly from industries, agricultural and unorganised powerloom sectors.

The board has also sought adequate subsidy from the state government to make up the losses due to uneconomical fixation of electricity tariff by the government.

The Maharashtra Electricity Regulatory Commission had recently revised the charges for the agriculture and powerloom consumers from Rs 170 to Rs 300 per horse power. However, the state government intervened into the matter and directed the board for charging them at the old rates.

The government also recently intervened in the controversial issue of sharing stand-by charges of power supplied by the MSEB to the distributing power companies BSES Ltd and Tata Power Ltd. Such politically motivated intervention had caused blocking the payment of about Rs 2.72 billion from the two Bombay-based power companies.

The MSEB once known as a most profit-making board in the country never is now reeling under huge debt burdens because of revenue earnings.

In addition, the frequent intervention by the government in preventing the board from taking up the discontinuation drive made the board further sick and weak, sources added.

In November, the monthly average recovery of the MSEB was seen improving at Rs 9.50 billion following state government's go ahead for discontinuation. However, the process faced roadblocks following the government announcement of withholding discontinuation on assembly floor during the Nagpur assembly session.

The government's directive resulted into a sharp fall in the average monthly recovery to Rs 8.10 billion from Rs 9.50 billion in December, sources claimed.

According to them, because of the concessional charges offered to the agricultural and powerloom consumers and the monthly payment of Rs 1.50 billion to the Enron corporation the MSEB has posted a net loss of Rs 16.81 billion and if the government continue to protect the consumers in arrears, the situation will be worst for the board in future, the sources pointed out.

Out of total 450,000 powerloom consumers, hardly 20 per cent consumers are paying their bills regularly. Out of total 13 million total consumers, the MSEB provides subsidised power supply to at least 90 per cent of its consumers.

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