MERC

Maharashtra Electricity Regulatory Commission

Mahavitaran

agriculture

Inflated supply to farm sector by 11,000 millio n units in 2018-19; probe panel believes it did the same since 2014An investigation committee formed by the state power regulator(MERC) has said that– the power distribution utility in Maharashtra – cheated consumers of Rs 22,000 crore and the government of Rs 8,250 crore by inflating consumption in thesector from 2014 to 2019.Mahavitaran claimed that it supplied 33,856 million units to the agriculture sector in 2018-19. However, a working group appointed by the MERC has found that the actual supply was 22,856 million units. On an average, 1,10,000 million units of power are consumed every year.Keeping 2018-19 as the baseline, it projected that Mahavitaran followed the same pattern of over-reporting beginning 2014. The mandate of the working group, which submitted its report recently, was to assess figures from only 2014 to cross-check findings of another committee submitted in 2017.Mahavitaran works on a cross-subsidy mechanism that allows it to supply power to poor consumers and farmers at low tariffs. It buys power for Rs 4 per unit and sells it to consumers, barring those in the agriculture sector, for a minimum of Rs 6 per unit. The industrial and commercial sector is charged at least Rs 3 more per unit. Farmers are charged Rs 1.50 per unit, with the government compensating Mahavitaran for the loss.Mahavitaran claimed that its distribution losses amount to Rs 15,400 million units a year—a loss of 14 per cent. With the addition of the 11,000 million units, the loss now stands at 24 per cent.The report said by inflating the number of units, Mahavitaran annually spent Rs 4,400 crore extra on purchasing power from 2014-19. It alleged that the additional purchase and concealment of distribution losses led to consumers being charged at least Rs 22,000 crore more, and the government Rs 8,250 crore in that period.The supply of power to the agriculture has long been mired in controversies. While Mahavitaran has cited poor recovery of dues from farmers for its high distribution losses, activists have for at least a decade alleged that it has been engaged in fraud. MERC has invited suggestions and objections to the probe report.The working group consisted of MERC’s Executive Directors Rajendra Ambedkar and GD Patil and was assisted by Pune-based thinktank Prayas, which works on issues related to energy; power sector consultancy firm Idam Infrastructure Advisory Pvt Ltd; and Hyderabadbased Administrative Staff College of India.The then BJP-Shiv Sena government had formed a committee in 2015 to assess Mahavitaran’s actual agriculture consumption, under the chairmanship of Vishwas Pathak, director of MSEB Holding Company, which has control of all state-owned power utilities. That committee, which submitted its report in 2017, found that the average use of pumps was 1,064 hours a year against the 1,900 hours claimed by Mahavitaran in 2014-15. Its mandate was to assess the figures of only 2014-15. No action was, however, taken on that report.The working group was formed after questions about the credibility of the Pathak committee were raised. Ashok Pendse, a consumer activist, said the new probe report should be taken more seriously since it has been drawn up by a panel appointed by the power regulator. He suspected that Mahavitaran had concealed its losses to allow it to become qualified for grants and soft loans offered by the Union power ministry. “It needs to fulfil certain performance parameters to be eligible for these,” said Pendse.Pratap Hogade, president of Maharashtra State Power Consumers Association, demanded that Mahavitaran refund the excess amount to consumers and lower tariffs.Text messages and phone calls to Mahavitaran’s Managing Director Assem Kumar Gupta were unanswered till the time of going to press.