BSES has appealed to the state government to review its decision to revoke its distribution license and settle the standby charges dispute at its level. Or else, it has requested the government to refer the matter to the Maharashtra Electricity Regulatory Commission (MERC) as a tariff proposal.BSES sources told The Financial Express on Monday that it was committed to protect the consumers and thus of the view that the matter be suitably settled at the government level or be referred to the MERC.

However, sources at the government and MERC have said that there was less scope for a review at the MERC level under section 22 of the Electricity Regulatory Commission Act 1998. Government sources said that the MERC has powers to give directives on new tariff proposals and thus cannot have any say on BSES-TEC dispute which dates back to 1998. The government is believed to have taken a stand that BSES would have to pay the standby charges dues to TEC or face the revocation of its licence to distribute power in Mumbai suburbs.

BSES sources said that TEC was paying standby charges of Rs 10.45 crore a month (Rs 125 crore per annum) to MSEB till September 1996. TEC was recovering these charges through its tariff from all consumers including BSES.

In January 1998 when MSEB hiked standby charges at Rs 297 crore per annum, BSES and TEC signed an agreement under which, BSES was to pay Rs 42 crore annually to TEC.

In December 1998, MSEB increased standby charges from Rs 297 crore to Rs 363 crore. It was agreed that BSES would pay Rs 27 crore annually while nearly Rs 39 crore to be borne by TEC to make up the rise of Rs 66 crore.However, following the recommendations of a committee headed by former energy secretary Pramod Deo, BSES was asked to pay Rs 181 crore towards standby charges. BSES sources said that it has been paid so far Rs 112 crore towards standby charges and as per the Deo committee report has yet to pay Rs 110 crore.