The Hindu Business Line : BSES told to stop offering rebates

THE Maharashtra Electricity Regulatory Commission (MERC) on Friday asked BSES Ltd (now Reliance Energy) to stop giving rebates to customers and recover the discounts it may have already given.

The regulator gave the order after rival Tata Power Company (TPC) complained in January 2003 that BSES was weaning away its customers by offering them illegal rebates in bills.

Upholding TPC's argument, MERC said BSES' contention that it had to give rebates to meet unfair competition from the Tatas does not have statutory support. The law states that only State electricity regulatory commissions have the power to determine power tariffs.

Disposing of TPC's petition, MERC said: "... the burden of past rebates and those, if any, extending until fresh determination of tariff by the Commission will have to be borne entirely by BSES, leaving the matter of how to compensate themselves for any loss for BSES to determine."

Tata Power had contended that BSES was diverting excess profit to match TPC's rates in a manner not permitted by law. It had said that BSES had also approached some of its existing customers with an offer of "Bulk supplier's tariff differential rate".

BSES, in turn, alleged that TPC was trying to force BSES to raise rates to certain categories of consumers so as to lure them away. Besides, it did not have any locus in the matter, as it was not BSES' consumer but only a bulk supplier. It also said that the rebates offered by them were actually reduction in tariffs aimed at maintaining sales.

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