From April 2028 onwards, the agrarian sector of the State could source its power supply from a dedicated company. Maharashtra State Electricity Distribution Company Limited (MSEDCL), in its multi-year tariff petition submitted to Maharashtra Energy Regulatory Commission (MERC), has expressed readiness to carve out a separate company for taking power supply to agriculture consumers. MSEDCL stated that work on segregation of network for agri-feeders is on at ground-level but the subject of establishing separate company comes under the domain of State Government. MSEDCL said, it being a Government company, only an executive order can carve out a separate entity. Inter alia, even Maharashtra Energy Regulatory Commission (MERC) is also empowered and can direct formation of separate company to meet energy needs of agri sector, the petition mentioned.

 

Additionally, the Discom mentioned that number of agriculture consumers in Maharashtra was one of the highest in the country, about 45 lakh, and they consumed 29% of electricity. April 2028 is taken into consideration as the current control period for multi-year tariff comes to end by March 2028. Thus, from April 1, 2028, when new tariff comes into effect for next financial year, the segregation can take place making it easy for levying of tariff on each of the sectors separately. The reason for a separate company for power supply to agri sector stems from cross subsidy element that leads to higher tariff burden on industry and commercial sector. In this context, MSEDCL referred to MERC order of March 31, 2023, that had directed State-run Discom to pursue option of carving out a separate agricultural company. MERC, that time, had also asked Maharashtra Government to undertake a study of Discom operations and lay down time bound plan for improvement in the performance.

 

The prevailing high tariff for industrial and commercial category consumers has reached a very high level due to cross-subsidy element, the Commission had stated in its order. Further, MERC felt that accounting of energy consumption as well as quality of power supply to agriculture consumer feeders require dedicated and focused efforts. Every time during hearing on MYT, the issue of high consumption in agri sector claimed by Discom was disputed by consumer representatives. This was so as many of the consumers were unmetered and it was seen as slackness on part of MSEDCL that it could not bring such a large number of high consumption sector under metered category. Therefore, MERC felt that separate agriculture power company can enable better monitoring and would also ensure accountability towards the consumers.

 

In the said order, the Commission had directed MSEDCL to chart out the modalities for implementation of establishment of a separate unit for agri consumers expeditiously. MSEDCL, thus in the current petition, has laid out a roadmap on going about bifurcating the assets and division of manpower in case a separate entity is to be formed for agriculture sector. MSEDCL mentioned that separate company would facilitate energy accounting for power supply to agricultural consumers at 11 KV level. Also, the separate company would be in advantageous position as it can carry out R&M activities on agricultural feeders without any interference from MSEDCL (only security clearance would be needed to take). Similarly, agricultural supply company would have complete responsibility as to metering, billing and collection from consumers connected to the segregated feeder. Also, they would have responsibility of all type of technical losses and commercial losses, freeing MSEDCL from this huge burden.