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News Brief | June 2011

SC allows open access, tariff hike likely

The Supreme Court (SC) allowed major industrial consumers to buy power from outside the state with the state power regulator’s permission. The SC had dismissed the petition of the Maharashtra State Electricity Distribution Company (MSEDCL) challenging the decision of the Maharashtra Electricity Regulatory Commission (MERC) to permit commercial and industrial consumers to buy power from outside the state. Commercial users in the state pay more than residential and agricultural consumers and this high tariff is used to subsidise power for domestic use. Now if industrial and commercial consumers stop buying power from suppliers in the state it will lead to depletion of the subsidy. The SC has also said that if a major consumer stops buying power from a state supplier, then it will not be obliged to give power in emergencies, which may deter consumers opting for open access. Also experts said that due to the SC order, a subsidy burden of around Rs 600 crore will be passed onto consumers and they may have to pay more in the coming months.
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