New Delhi: Competition Commission has ordered a probe into alleged abuse of dominant position by Maharashtra State Electricity Distribution Company, which supplies power across the state except Mumbai.
The probe, to be conducted by the CCI's Director General, has been ordered following a complaint filed by trade body Vidharbha Industries Association against MSEB (Maharashtra State Electricity Board) Holding Company Ltd and its three subsidiaries, including Maharashtra State Electricity Distribution Company.
The other two subsidiaries are Maharashtra State Power Generation and Maharashtra State Electricity Transmission.
Following complaints that MSEB and its three subsidiaries were abusing their dominant position in the market for distribution of electricity in the state of Maharashtra, CCI said in an order that a "prima facie case" of contravention of certain section the Competition Act is made out against Maharashtra State Electricity Distribution Company.
CCI in a order dated August 5 asked its Director General to complete the investigation within 60 days.
"During the course of investigation, if involvement of any other party is found, the DG shall investigate the conduct of such other parties, including the conduct of group companies, if any," the regulator said, while making it "clear that nothing stated herein shall tantamount to an expression official opinion on the merits of the case and the DG shall conduct the investigation without being influenced by any observation made herein."
In its complaint, Vidharbha Industries Association alleged that the entities had abused their dominant position by deliberately generating and distributing electricity in "extremely inefficient manner" and by denying market access to other efficient and economical power generating companies.
The probe would also look into role of the persons who were in charge of these companies and could have been responsible for the alleged conduct of the companies.
The Competition Commission of India (CCI) noted that Maharashtra State Electricity Distribution purchased power from Maharashtra State Power Generation at rates which are comparatively higher than the rates offered by other entities which translated to a higher tariff for the end consumer.
CCI observed that Maharashtra State Electricity Distribution had denied 'open access' to consumers thereby restricting competition in the distribution market.
Under the Electricity Act, the concept of open access allows consumers consuming electricity above 1 MW to buy cheaper power from alternative power generator.
"The consumers are left with no choice but to keep buying power at whatever rate the distribution company supplies," the regulator said.
"On the other hand, a generator, who can become a rival distributor through open access, cannot supply electricity to the consumers," it said adding that this conduct was in violation of the competition norms.
The fair trade watchdog noted that Maharashtra State Electricity Distribution is the only licensee distributor of electricity in all areas of Maharashtra except Mumbai.
"Hence, it is a monopoly distributor of electricity in the relevant market".
