The Hindu Business Line : Non-payment of additional deposit — Regulator stops BSES from cutting supply

THE State electricity regulator on Thursday stopped BSES Ltd from cutting supply to about 20 lakh users if they did not pay an "additional security deposit" demanded by the company.

BSES Ltd, now part of the Reliance Group, last week told its customers to pay a deposit equal to three months' usage or face disconnection of power supply after seven days. The Maharashtra State Electricity Regulatory Commission (MERC) on Thursday stopped BSES from acting on the ultimatum after consumers complained the demand was illegal.

According to varying estimates, the company will collect anywhere between Rs 200 crore and Rs 1,000 crore through the mobilisation, with consumers having to pay between Rs 3,000 and Rs 10,000 depending on usage. The company has offered to pay 5.5 per cent interest on deposits.

"BSES claims charging the deposit is part of `approved conditions of supply' under its licence. However, MERC had, on January 10, 2000, said security deposit charged by power companies would be equal to one billing cycle," Mr Ashok Pendse of Mumbai Grahak Panchayat (MGP), who moved MERC for consumers, told Business Line. MGP has challenged BSES' right to charge an "enhanced security deposit." BSES had threatened consumers with disconnections under the Indian Electricity Act, 1910. "All other electricity laws were repealed after the Electricity Act 2003 came into existence," said Mr Pendse.

On learning of BSES' demand, Business Line contacted company officials last week and was assured that "only defaulting consumers" need pay the security deposit.

More time for payment

BSES said in a press release on Thursday that power supply to consumers would not be disconnected on not paying the `additional security deposit.'

The company has extended the time period for payments, which can now be made in three equal instalments instead of a single payment. BSES said the "impact" of additional security deposit on a "vast majority of residential consumers" would be an average Rs 60 for three months.

The Mumbai Grahak Panchayat, on the other hand, said it would seek an order from MERC clarifying whether even deferred payments of security deposit should be allowed.

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