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Vandana Saxena
Mumbai, Dec 21: The Maharashtra government is dragging its feet over constituting the State Electricity Regulatory Commission (SERC). Six months ago, the state government had announced that it would be the first to have the SERC in place as per the norms of the Electricity Regulatory Commission Act, 1998.
Under the Act, the states are to appoint a select committee which would in a month notify the panel members for the SERC to the state government for approval. The state appointed the select committee in August. There was a delay, but the state promised to set up the commission by October.
"The state governments approach has sent wrong signals in an already depressed market," according to a highly placed official of a financial institution. The state has been inviting private investment in the power sector by projecting itself as a reform-friendly state, but it has failed to deliver on its promises, he added.
Meanwhile, announcements made by Shiv Sena leader, Bal Thackeray, granting free power to theagricultural sector are contrary to the very reasons for which the regulatory authority is sought to be established, say industry experts. The SERC is primarily required to keep the sector insulated from political interference.
"Though the proposed SERC is meant to be independent and free from political influence, the appointment procedure provides enough room for control," said an industry observer. The select committee gives a list of the names, from which the final selection is made by the government, he added.
The ongoing campaign against the increase in power tariff also criticises the state for not implementing the Rajadhakshya committee recommendations for restructuring the electricity board.
The critics not only blame the Maharashtra State Electricity Board (MSEB) for inefficiency, but also believe that the recent tariff hike is largely to pay the private power producers. They believe that the state is committed to a high price of electricity to some projects being developed bymultinationals.
Observers believe that the state could have contained much criticism if it had set up the regulatory authority. The SERC is to have experts from the power industry, and finance and legal professions. The commission will have the power to fix electricity tariff for wholesale, bulk or retail use.
It will also decide tariff for transmission facilities and regulate the purchase and procurement process of transmission and distribution (T&D) utilities in the state. This includes the price of electricity procured from generating companies/stations or from other sources for transmission, sale and distribution of power.
SERC will also regulate investment approval for generation, T&D and working of licencees. It will set standards for the electricity industry on quality, continuity and reliability of services. SERC will adjudicate upon the disputes between licencees and utilities and help the state formulate a power policy.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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