Will Move Tribunal Against MERC Tariff Order: Expert
•February 11, 2026
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Why It Matters
The outcome will shape power costs for millions of businesses and influence the regulatory climate for renewable energy projects in Maharashtra. A higher tariff or prolonged legal uncertainty could suppress industrial growth and deter clean‑energy investment.
Key Takeaways
- •MERC hearing faced strong opposition from industry and consumers
- •MSMEs risk closure due to 25‑30% tariff hike
- •Legal challenges question MERC’s authority on review petition
- •Renewable‑energy banking restrictions could stall solar investments
- •Lack of transparency fuels regulatory uncertainty
Pulse Analysis
The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has sought a review of its multi‑year tariff (MYT), prompting a public hearing before the Maharashtra Electricity Regulatory Commission (MERC). Stakeholders, especially representatives of micro, small and medium enterprises, warned that the proposed tariff could raise electricity costs by 25‑30 percent, squeezing profit margins and threatening plant closures. For an economy where power costs already exceed many Indian states, such an increase risks curbing production, delaying loan repayments, and eroding employment in labor‑intensive sectors. The hearing therefore became a flashpoint for industry‑government tension.
The legal dimension adds further complexity. The Bombay High Court previously ruled that MSEDCL’s review petition fell outside statutory provisions, yet MERC admitted the case and issued a new order, prompting experts to threaten an appeal to the Appellate Tribunal. A contempt petition is also slated for the Supreme Court after allegations that MSEDCL ignored a court‑mandated tariff timeline. This procedural tug‑of‑war creates regulatory uncertainty, leaving consumers unsure whether any forthcoming order will apply retrospectively, and undermines confidence in the state’s dispute‑resolution mechanisms.
Beyond immediate cost concerns, the tariff debate touches on India’s renewable‑energy transition. Critics highlighted that MERC’s draft grid‑support charges hinge on a 5,000 MW threshold, effectively limiting renewable‑energy banking and jeopardising ongoing solar projects. Such restrictions could deter private investment, slow capacity addition, and conflict with national clean‑energy targets. Transparent, data‑driven tariff setting—balanced against the need to recover legitimate distribution costs—will be essential to protect both industrial competitiveness and the broader energy‑security agenda. Stakeholders are calling for clearer guidelines and stakeholder‑inclusive processes to restore market confidence.
Will move tribunal against MERC tariff order: Expert
Concerns were raised about rising electricity costs impacting industries, particularly MSMEs, and legal challenges to the review process.
By Viraj Deshpande, TOI.in
Published on Feb 11, 2026 at 02:36 PM IST
Nagpur: Several speakers at the public hearing on Maharashtra State Electricity Distribution Company Ltd's (MSEDCL) review petition related to its multi‑year tariff (MYT) urged the Maharashtra Electricity Regulatory Commission (MERC) to reject the plea. The hearing was held on Tuesday and saw participation from around 30 power experts, consumer representatives and industry voices, making it the third such hearing on the issue in the past year.
Congress spokesperson Atul Londhe said higher electricity tariffs in Maharashtra were adversely affecting industries, particularly micro, small and medium enterprises (MSMEs), and were putting pressure on production and employment. He said rising power costs were making it difficult for small units to sustain operations, repay loans and remain profitable, with some facing the risk of closure.
Londhe urged the government and regulatory authorities to review the tariff structure and examine why electricity rates in Maharashtra were higher than in other states. He said the impact of high tariffs went beyond industries, affecting employment generation and overall economic activity, and called for immediate corrective steps to protect small businesses and jobs.
Power expert and former independent director of MSEB Holding Company RB Goenka, representing Vidarbha Industries Association (VIA), strongly criticised the process followed in the tariff review. He said tariff petitions were earlier discussed with consumer representatives before being made public, but this practice had been abolished.
Goenka claimed the High Court had already declared MSEDCL's review petition illegal, as it did not fall within the provisions of a review petition. Despite this, the hearing process continued and the petition was admitted by MERC, he said. Goenka added that even if the commission issued an order, the legal battle would continue and he would approach the Appellate Tribunal.
He raised concerns over which tariff would be applicable to consumers in the interim. “The HC order in para 48 quashed MERC's order but stayed its own order for four weeks. After this, the March 28, 2025 order should come into effect as per the HC order. That period expired on December 3, and since then the March 2025 tariff should be applicable,” Goenka said.
Goenka further alleged that a comparison between the March 2025 and June 2025 orders showed a tariff increase of nearly 25 % to 30 %. “Even the Supreme Court said para 48 of the HC order should be applicable, so MSEDCL is violating the Supreme Court's order. A contempt petition is being filed before the SC against MSEDCL. The SC gave 12 weeks' time to the commission to issue an order on the petition, but the time expired on February 9. There is no clarity on whether the commission's order, if issued, will be imposed retrospectively or not,” he said.
Power expert Sudhir Budhay also urged MERC to reject the review petition, calling it premature and unsupported by data. He said grid‑support charges could not be imposed until the 5,000 MW threshold was reached. He warned that restricting renewable‑energy banking would hurt existing solar projects and investors, and negatively impact consumer interests and regulatory certainty.
Power consumer Mahendra Jichkar expressed disappointment over the outcome of earlier hearings. He said many experts and consumers attended such hearings by taking time out of their schedules, hoping their suggestions would be considered, but alleged that MERC did not adequately factor in these submissions.
Jichkar said the March 2025 tariff order, which was widely welcomed, was stayed within an hour of the hearing without giving interveners a proper opportunity to be heard, and a new order was issued. He also questioned the practice of allowing truing‑up petitions after a five‑year MYT was finalised, stating that consumers ultimately bore the burden of higher tariffs.
The hearing saw strong opposition to MSEDCL's review petition, with multiple stakeholders flagging concerns over rising electricity costs, legal uncertainty and the need for greater transparency in the tariff determination process.
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