The Mumbai high court had ruled in a case filed by the Thane Belapur Industries Association (TBIA) that any tariff revision in future will be subject to the decision of the State Electricity Regulatory Commission (SERC). The TBIA filed the case opposing the increase in tariff by the MSEB in September last year.

The TBIA said that MSEB's decision is not justified because it will be able to generate sufficient resources if it improves its management. It argued that the consumers should not be made to pay for the inefficiency of the board.

The association said that MSEB has even failed to recover huge arrears pending with various consumers. Apart from this, the board has also failed to reduce the transmission and distribution losses.

Criticising the state government's decision tosupply free power to farmers, the industry association said that the industries are overburdened by the high cost of cross subsidies and that a further increase in power tariff will severely affect industrial growth.

In this view, the high court said "the hike which was made in September last will also be examined by the SERC." The court had also asked the state government to set up the commission in six months from the date of judgment (February 26).

However, in case the commission is not in place and the tariff revision is proposed by the MSEB, the board may make an application to the court, states the judgment. The hike in tariff due to the increase in fuel cost was, however, not objected to by the court.

Meanwhile, the industry is paying the increased charges to the board. "We are paying the revised tariff in protest," said SL Patil, secretary general of TBIA, adding that there was a risk of electricity supply being cut off.

The tariff dispute between the MSEB and its consumers has been on for awhile now. The industries also feel that the board's decision to increase tariff was largely to meet its payment obligation to some independent power producers to whom it has committed a higher tariff.

While the board has to pay a high tariff to these companies, it can in not recover this increased cost from the agriculture sector or pass the entire burden to domestic consumers and has, hence hiked industrial tariff.