MSEDCL seeks Rs 330 cr to tackle power crisis

The state-owned power utility MSEDCL has asked the Maharashtra government to give it Rs 330 crore over next two to three months to buy around 600 MW of costly power to overcome the huge deficit. The state cabinet will take a decision on MSEDCL's proposal in its weekly meeting on Tuesday.

Fearing political backlash from such a huge power shortage in forthcoming zilla parishad and panchyat samiti elections, state government is adopting desperate measures like buying expensive power from wherever possible and increasing the number of industrial holidays from one to two.

MSEDCL given this proposal to in a meeting, called by chief minister Vilasrao Deshmukh to discuss various options before the state government to overcome this situation.

Deshmukh has asked finance and power ministry officials to prepare a cabinet note on MSEDCL's proposal and place it in Tuesdays cabinet meeting.

MSEDCL sources said, they are negotiating terms and conditions with Gujarat-based Adani Group who are into power trading business, also with Damodar Valley Corporation to buy around 100 and 50 MW power respectively. However problem with these suppliers is that they will not be able to give us assured power supply, sources added.

So we are heavily depending on two Andhra Pradesh-based plants of independent power producers (IPPs) who will be able supply power to us around 600 MW but all this power will be expensive, costing us around Rs 7 per unit and it is beyond our financial resources to buy such a expensive power continuously, sources pointed out.

Replying to question said, "Once cabinet gives us go ahead to buy this expensive power, we will approach Maharashtra Electricity Regulatory Commission (MERC) and ask them to allow us to recover this cost from consumers. Once we know MERC's decision on to what extent they allow us to recover the cost from consumers, decision will be taken at later stage, whether to treat government's financial assistance as their additional equity, loans or subsidy to us."