The Meghalaya Power Distribution Corporation Ltd (MePDCL), the subsidiary of the Meghalaya Electricity Corporation Ltd (MeCL), has signed an agreement by which it will sell power at a cheaper rate exclusively to the members of the Byrnihat Industries Association (BIA).
The MePDCL had planned to make a special tariff offer of Rs. 6/KW for the general industries sector, but inexplicably ended up penning a memorandum of understanding (MOU) to sell power at the rate of Rs. 4.90/KVAh to the members of the Ri Bhoi located BIA on the Meghalaya Assam border.
The Rs.4.90/KVAh was the counter offer made by the BIA which MePDCL seems to have accepted without any problems, something that is worrying many observers. This will result in a loss of Rs.28 crores in three years, experts say.
The said agreement which was penned on October 7, 2020 was also approved without going into the economics of the tariff vis-à-vis the financial position of the company and its likely impact by the Meghalaya State Electricity Regulatory Commission (MSERC).
An order signed by the Chairman, P W Ingty, former bureaucrat and member, retired judge Roland Keishing dated October 19, 2020 said that the Commission approved of the petition of MePDCL for special tariff for an initial period of three years with the conditions laid down in the MOU.
Nowhere is it explained how the lower tariff proposed by the BIA is accepted and why they easily abandoned their original proposal of Rs.6/KWH, when it is understood that this figure must have been settled on with some strong business calculations behind it. Moreover, there is no information about how this figure of Rs 6 was arrived at.
Several sources spoken to felt that the MSERC was rather lackadaisical in not questioning these aspects. But even more serious among many points is the allegation that the MSERC has allegedly misquoted a relevant para ie 8.4 from the National Tariff Policy, 2016 to justify their acceptance. The para as quoted by the MSERC in its order said, “It is also pertinent to state that under the National Tariff Policy 2016, the Ministry of Power resolution dated 28/01/2016, vide Para 8.4 reads as- “Licensee may have the flexibility of charging lower tariffs than approved by the State Commission if competitive conditions require so without having a claim on additional revenue requirement on this count in accordance with section 62 of the Act.” Thus, charging lower tariffs than approved by the State Commission is permissible provided the conditions are fulfilled. “
Whereas the para as written in the National Tariff Policy, 2016 says something different and talks about the definition of tariff components and their applicability.
The MSERC also accepts the reference to the tariff policy of Bhutan which the BIA says offers a much lower tariff and dangles it up as an alternative they are going to take if their demand is not met. Observers said that the mention of Bhutan, which is a foreign country itself should have been dropped from its order instead of allowing the BIA to dictate its terms based on such specious arguments.
While the offer of this low tariff has been made only to members of the BIA nothing has been mentioned about the other industrial consumers in the state who will have to pay a higher rate, a condition which is unjust and against the consumer laws.
It may be mentioned here that the many of the BIA members are yet to pay up their bills of crores of Rupees over the years. To this section, the MePDCL has offered a onetime settlement offer, but without specifying what this settlement actually going to be. This it could mean a huge loss for the corporation.
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