MSEB sources confirmed this development and told The Financial Express that the company has already conveyed through a communication that there would be no generation from phase-I. "As per the power purchase agreement, this is allowed, as the MSEB will not have to pay capacity charge during these days," MSEB sources added.

Enron India managing director K Wade Cline said: "I cannot confirm this nor deny the possibility of a close-down, as I am involved in certain larger issues."

MSEB sources said that it has already stopped drawal of power from phase-I since March 9, following high frequency and online capacity to meet the power requirements in the state. According to MSEB, its frequency is around 49.5, while it was in a position to meet the demand of 9,100 mw. In addition to this, Tata Power and BSES have been generating nearly 1,500 mw.

"We, in fact, wanted to draw Dabhol power on Wednesday. However, we decided not to do so, as the DPC will shut down its phase-I plant for interlinking with phase-II for 66 hours," these sources added.

According to MSEB, it would take a decision on the drawal of power from DPC after taking into account the frequency and power availability.

The DPC has already stopped power generation during trial run of Block B (722 mw) of phase-II,since March 10, following a closure notice served by the state-run Maharashtra Pollution Control Board for the violation of various provisions of Water (Prevention and Control of Pollution) Act and Air (Prevention and Control of Pollution) Act.

MSEB sources said that the decision to shut down would help save its monthly outgo which has been restricted at around Rs 150 crore.

MSEB sources said that the DPC had recently conveyed to it that the company had agreed to close down Phase-I during trial runs of Block B of phase-II to avoid additional burden on the MSEB in view of its precarious conditions.

However, the company had made it clear that the MSEB would be entitled to take benefit of such relaxation for not more than five times a month.