Mumbai, Jan 27 (PTI) State electricity regulator, MERC,today directed Mula Pravara Electric Co-operative Society(MPECS) to merge its licensed distribution area with stateelectricity utility MSEDCL, following its incapability to payaround Rs 2,200-crore of defaulted bill payments.
The society, run by former Union Minister BalasahebVikhe-Patil, is a distribution licensee that buys power fromMSEDCL at a bulk rate and distributes it amongst its consumersin 183 villages in Ahmednagar district, most of whom arefarmers.
The order will come into effect from February 1 fromwhich date MSEDCL would start distributing power in this area.
MSEDCL had filed a petition with the MaharashtraElectricity Regulatory Commission (MERC) for initiating aninquiry to cancel Mula Pravara''s license and merge it with itsdistribution area.
MERC had asked the Administrative Staff College of India(ASCI) in Hyderabad to enquire into the functioning of thesociety.
ASCI had pointed out large-scale irregularities in MulaPravara and suggested the merger of its licensed distributionarea with MSEDCL.
MERC in its order stated that since MPECS did not haveany concrete power purchase plan as well as no financialcapability to procure power without any external support, itdoes not have the credibility to function as a distributionlicensee. .
"It is noticed that MPECS does not have financial credibility and capability to procure power for supply to itsconsumers, which will not enable the satisfactory fulfilmentof the function of supply of electricity to its consumers. Inthe circumstances, the Commission rejects the distributionlicense application of MPECS," the order said.
Mula Pravara was the first such society to be set up in1971 and has been procuring power from the then MSEB. It wasagreed that the society would be supplied power for 20-years.
Later, it was extended for another 20-years.
MSEDCL had submitted that it would not be able to supplypower to MPECS from February 1, 2011, onwards, when there hasbeen a large outstanding and also when Mula Pravara is not ina position to pay the Bulk Supply Tariff in full as determinedby the Commission.
MERC has also directed that the electrical systems andassociated assets of MPECS required for the distribution andretail supply of electricity need to be vested in MSEDCL toenable it to maintain an uninterrupted supply of power to theelectricity consumers.
The Commission has directed MPECS to vest its entireinfrastructure of electricity distribution and power systemincluding the electrical system, sub-stations, overhead lines,service lines, offices and associated facilities like lands,buildings, works, material, stores and plants in the area ofits operation in MSEDCL.
"All the assets and the distribution network currentlybelonging to MPECS are permitted to be used by MSEDCL withoutany wheeling charge for the same," the order stated.