Mumbai: 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. The petitioners included solar and renewable energy companies, datacentres, the National Solar Energy Federation of India, and the Vidharbha Industries Association.
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 a 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 and was hence, against the principles of natural justice.
The petitioners pointed out that the review order had recategorised hotels and lodging facilities from HT I (industrial category) to HTII (commercial category) which would require them to pay much higher tariffs for the financial years 2025-26 to 2029-30.
The petitioners also said that the MERC, in its original MYT order, had initially approved a total capitalisation of ₹31,749.83 crore for the financial years 2022-2023 to 2029-2030. However, the ex-parte review order in June approved additional capitalisation of ₹55,624.50 crore, on MSEDCL’s request.
“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 before taking a decision.
Though the regulations require considering suggestions or objections received from the public before issuing a MYT order, they do not mean a public or personal hearing, MERC and MSEDCL told the court.
The court, however, observed that the original MYT order ran into 95 pages while the review order was 86 pages long. The judges said it was clear that the review order “is 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 would be ludicrous to suggest that the affected parties are not to be given an audience,” the court noted, especially when the MERC had heard them before passing the original MYT order.
The court 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.