HC quashes MERC's review order hiking electricity tariffs, orders fresh hearing
Mumbai, Nov. 6 -- Granting relief to power consumers including renewable energy companies, the Bombay High Court on Tuesday set aside a review order of the Maharashtra Electricity Regulatory Commission (MERC) that led to increased tariffs for a range of consumers.
The review order was passed by MERC on June 25, after the Maharashtra State Electricity Distribution Company Limited (MSEDCL) sought a review of its Multi-year Tariff (MYT) order dated March 28. Subsequently, 12 different petitions were filed in the high court, challenging the review order.
Among other things, the review order allowed customers of solar energy companies to utilise banked energy for eight hours a day while the original MYT order had allowed use of banked energy for 17 hours/ day.
"One can hardly dispute that this is a significant change from the original MYT order and affects all solar generating companies and their customers," justices B P Colabawalla and Firdosh Pooniwalla observed.
A battery of senior advocates representing the petitioners argued that the MERC's review order, which substantially modified the original MYT order, was passed without hearing all stakeholders, violating the principles of natural justice.
The review order had also recategorised hotels and lodging facilities from HT I (industrial category) to HTII (commercial category) which would require them to pay much higher tariffs till 2029-30, the petitioners said. The ex-parte review order had also approved additional capitalisation of Rs.55,624.50 crore, on MSEDCL's request, the said.
"Due to this ex-parte increase in the CAPEX (capital expenditure), the tariff of consumers or the public stands increased," the petitioners contended.
The MERC and MSEDCL, also represented by senior advocates, contended that fixation of tariff was the MERC's legislative function under the Electricity Act, 2003 and not an adjudicatory one that required them to hear all stakeholders.
The court, however, said that the review order was "not passed to correct any clerical or arithmetical mistake, and neither to correct any accidental slip or omission in the MYT order".
The court said the review order had far-reaching consequences on stakeholders including consumers. It quashed the review order and asked the MERC to decide the case afresh after hearing all stakeholders.
The judges, however, granted a four-week stay on the order to allow the MERC and MSEDCL to move the Supreme Court....
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