Energy

Internal Conflict at Maharashtra’s Power Regulator Leads to Recusal of Member

Sources say that Anand Kulkarni superseded Azeez Mehdi Khan as chairman of the MERC because the government was unhappy that the latter refused to toe the official line.

New Delhi: The Maharashtra Electricity Regulatory Commission (MERC) has plunged into administrative turmoil, with its member Azeez Mehdi Khan recusing himself from hearing of all fresh cases allegedly due to internal conflict with chairman Anand Kulkarni.

A resolution to this effect was passed by the MERC recently. Khan – who was acting chairman of the power regulator before being superseded by Kulkarni in May 2017 – will, however, continue to hear review cases.

Now a bench comprising chairman Kulkarni and Deepak Lad, another member, will hear all fresh tariff petitions. The Wire has learned that Lad too could follow in Khan’s footsteps as he is not comfortable working with Kulkarni.

The timing assumes significance as the regulatory commission is going to start hearing the annual tariff petitions of power distribution companies (discoms) soon. Sources say Khan’s recusal decision was triggered by differences with Kulkarni, who became MERC chairman despite being junior in terms of seniority. Khan, a 1979 batch IAS officer, is three years senior to Kulkarni who was inducted into the administrative services in 1982.

People with knowledge of the matter also told The Wire that the state government installed Kulkarni as the chairman as it was unhappy with Khan, who tended to act independently and refused to pay heed to its directions on tariff hikes.

Azeez Mehdi Khan. Credit: mercindia.org.in

Azeez Mehdi Khan. Credit: mercindia.org.in

However, when contacted, Khan told The Wire that he has a lot of pending work, which he wants to complete before he retires in May next year. Lad, when contacted, corroborated Khan’s version.

Across India, power subsidies are often a tool for political parties, with state governments tending to fill electricity regulatory commission with loyal bureaucrats so that tariff hike decisions can be pushed through easily. This trend has frustrated the Centre, which has tried to push states on the path of power reform.

The V. K. Shunglu committee, set up by the UPA government in July 2010 to examine factors impacting the health of state electricity boards, too confirmed this suspicion. It recommended insulating regulatory commissions against interference by state government.

It suggested that chief justice of the high court of the concerned state and chairman of the central electricity regulatory commission should be part of the panel formed to select chiefs of state electricity watchdogs. However, the recommendations are yet to be implemented.

The cumulative losses of discoms had shot to nearly Rs 2 lakh crore at the end of September 2012. The then UPA government had to bring a package to bail out discoms at the verge of a financial collapse.

But within less than three years, discoms again slipped into bankruptcy. The combined losses of all discoms shot up to Rs 4.3 lakh crore as at the end of September 2015, forcing the new NDA government to pilot another bail-out package for them.
After availing the financial package, discoms have again slipped to their old ways on the implementation of power reforms.

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