Merc, during a hearing on the state government's proposal seeking its approval for the release of subsidy to the MSEB, as per the provision of Electricity Regulatory Commission (ERC) Act 1998, wanted to know whether the government would release all the subsidy amount by March 15. The Merc also asked the government to specify the tariff fixed by it and the subsidy amount separately, while issuing the bills to the agricultural and powerloom consumers. State energy secretary Vinay Mohan Lal assured the MERC, that it would make the necessary affidavit on Tuesday. He however, expressed the state's inability on account of an overdraft situation to release the subsidy amount of Rs 746 crore, cleared by the state cabinet to MSEB in phases. He added that it would partly be cleared by March 31, while the balance is to be made available to MSEB by October 31 this year.

However, MSEB insisted that the MERC should clear the government's proposal on the grounds that the 55 per cent of arrears of low-tension powerloom consumers would be waived, if they paid 45 per cent of arrears on or before March 15, 2001.

MSEB's technical director (distribution) PR Deshpande informed the MERC that the total arrears payable by the low tension powerloom consumers as on December 31, 1999 was Rs 109.24 crore. He said that in case the proposal of the state government to waive 55 per cent of arrears of energy bills payable as on December 31, 1999 is approved by the commission, "the loss of revenue to the MSEB on this account would be Rs 59 crore." MERC member Venkat Chary emphasised the need for the certification of Rs 800 crore amount of subsidy by an auditor or any other related authority. Furthermore, MSEB submitted that the total arrears payable by the agricultural consumers as on June 30, 2000 were of the order of Rs 1,332 crore and if approved by the commission, "would result in blocking of MSEB's revenue to the extent of 75 per cent of the said arrears (Rs 999 crore)."

MSEB called upon the MERC to direct the state to extend an interest free loan of Rs 999 crore to it immediately, to take care of such situations causing "loss of liquidity." However, state energy secretary told the panel that the government has already rejected the MSEB's proposal in this regard.

Godbole Committee interim report likely by March-end
The Madhav Godbole energy review committee, whose terms of reference have been widened and has been given one month's extension on March 9, is likely to submit its interim report either on March 22 or by the end of this month. The interim report is expected to be tabled in both houses of state legislature during the ongoing budget session.