Mumbai: Not satisfied with Adani's response, MERC opens probe

Dec 07, 2018, 10:00 IST | Dharmendra Jore

With power major unable to explain inflated bills to suburban consumers, agitated regulator decides to launch inquiry

Mumbai: Not satisfied with Adani's response, MERC opens probe
Shiv Sainiks protesting against the high power bills by Adani Electricity in Bandra East on Thursday. Pic/Rane Ashish

Even on Day 2 of its submissions against allegations of sending inflated power bills to consumers, the Adani Electricity Mumbai Ltd's distribution company (AEML-D) was not able to answer MERC's basic queries. As a result, the agitated regulator has decided to launch a thorough inquiry into the entire episode. An announcement to this effect is expected today.

Thursday was the second day of interactions AEML-D was having with MERC after it was served a show cause notice on Tuesday. Sources in MERC told mid-day that the company could not even provide the exact number of affected consumers, the reasons for billing exorbitantly despite a marginal increase in tariff, and listing technical or systemic faults that could have caused a hole in the pockets of the consumers.

Futile interaction
A senior MERC official told mid-day on the condition of anonymity that the interaction proved futile as they got no satisfactory response from the electricity distributor. The official said, "No straight answers were forthcoming from the company despite our repeated questioning. Since the response given by the company wasn't sufficient to form an opinion, the commission has decided to conduct an inquiry," the official said.

According to the official, there was no way to ascertain whether the meters were faulty or replaced. "The company said the employees [meter readers and others] stopped working for five days after the company took over the Mumbai business from Reliance. They didn't even tell us about any systemic and human errors that have caused this huge public outcry," said the official who is part of the team that interacted with AEML-D representatives. "We at the commission wonder how a marginal average increase can impact consumers badly. How could there be a 20 per cent hike in many cases when the revised tariff is not [that] high? The company said power consumption increased because of the heat wave; is such an enormous spike possible even in a changed weather ?," said the official.

Studying balance sheets
It has also been learned that AEML-D has spoken about the financial liabilities that were transferred to it while acquiring the Mumbai business. "The commission revised the tariff based on the petition and public hearings. But now, the commission needs to verify the financial claims, if any, by studying the previous and current balance sheets of the former owner [Reliance] and the new owner [AEML]. We'll have to check the accounts [billing and other related financials]. It's a huge task and cannot be completed quickly. The commission has decided to conduct a probe for which the mechanism will be declared on Friday," said the official.

'Is such a spike possible?'
Taking cognisance of mid-day's extensive reportage about excessive billing for suburban power supply, MERC had on Tuesday asked AEML for an explanation within 24 hours. AEML had furnished evidence in the case of inflated power bills in the given time frame, but was asked for more details by Thursday. Upon being asked about Friday's announcement, MERC chairman Anand Kulkarni neither confirmed nor denied information received by mid-day. But he confirmed that AEML-D had furnished additional details on Thursday. He also said that the commission would hold a media conference at its World Trade Centre office Friday afternoon.

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