MERC grants AMC relief on issue of power dues

Aurangabad: The Maharashtra Electricity Regulatory Commission (MERC) has ruled that the tariff category of Public Water Works (PWW) applies for water schemes irrespective of whether or not they are operated and/or maintained by private entities.

The crucial verdict has been given in the dispute between Aurangabad Municipal Corporation (AMC) and Maharashtra State Electricity Distribution Corporation Limited (MSEDCL) over settling dues worth Rs92 crore. The cash-strapped AMC, which was yet to paid the dues, has received a major relief thanks to the ruling delivered on August 1.

While disposing AMC’s petition seeking elaboration on applicability of tariff, MERC has clarified that its previous two related orders apply to water supply schemes and sewage treatment plants owned by local self-government bodies, Maharashtra Jeevan Pradhikaran (MJP), Maharashtra Industrial Development Corporation (MIDC) and Cantonment Boards irrespective of whether or not they are operated and/or maintained by private entities appointed by them.

Consumers representative on MERC Hemant Kapadia, who argued before the power regulator in support of AMC, said on Thursday that the state power utility had misconstrued earlier tariff orders while seeking the additional amount.

It was also brought to the notice of MERC that Orange City Water, a private firm that supplies water to Nagpur, is being billed under public water works (PWW) scheme tariff category. Similarly, MIDC has appointed a private company to operate and manage its sewage treatment plant at Waluj. As it was pointed out earlier, the ultimate burden will be passed onto citizens in case a commercial tariff is applied, MERC dismissed claims made by the power utility and directed PWW to charge AMC, he said.

The period of dispute corresponds between 2014 and 2016 when the water supply scheme was owned by AMC but operated and maintained by Aurangabad City Water Utility Company Limited (ACWUCL).

The MSEDCL flying squad had pointed out that since operation and management is carried out by a private company, commercial tariff should be charged and, accordingly, a bill for difference in tariff amounting Rs92 Crore was issued to AMC.

A commercial water tariff category was applied for half of the 22 public water works schemes distributing water to Aurangabad and nearby areas. Taking objection to the tariff category, AMC first approached MSEDCL’s Consumer Grievances Redressal Forum and later sought justice from MERC.

While pleading that PWW tariff should have been applied during concerned period, AMC stressed that the private company was appointed only for the purpose of operating the scheme and its ownership was with AMC during the disputed period.

In its defence, MSEDCL highlighted relevant clauses in the agreement between AMC and the private company, as per which the civic body was allegedly not authorized to agitate the issue before MERC.
The MSEDCL has interpreted the Commissions Tariff Order dated August 16, 2012 as stipulating that the PWW category is applicable to public water supply schemes owned as well as operated and managed by local bodies. As the water supply scheme was being operated by a private company, the benefit of PWW category was denied, MSEDCL had told MERC.

While arguing before the energy regulator, Kapadia argued that many local bodies have been outsourcing works relating to operation and maintenance of water supply and sewage schemes to private agencies for economic and administrative reasons.

When contacted, senior MSEDCL officials said they would comply with the MERC ruling. The latest verdict has brought more clarity to applicability of PWW tariff category, a senior official said. AMC authorities could not be reached for comment.

 

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