Mumbai: The Maharashtra Electricity Regulatory Commission (MERC) will hear on 2 May a petition filed by state-owned power distribution utility Mahavitaran Ltd seeking to recover the costs it incurs on renewable energy from industries responsible for pollution and climate change rather than from ordinary consumers.

The Mahavitaran petition, filed on 1 February, argues on the lines of the “polluter must pay” principle, saying consumers should not be forced to bear the burden that industries, such as metal processing and chemicals, impose by guzzling energy or emitting greenhouse gases such as carbon dioxide that result in climate change.

Mint has reviewed a copy of the petition.

In a January 2010 notification, the national power regulator, Central Electricity Regulatory Commission (CERC), made it mandatory for all distribution utilities to generate 5% of their total power purchases from renewable sources. The notification became effective in April 2010.

The notification said the requirement would increase by one percentage point every year for the next 10 years till the total purchase from renewable energy sources reaches 15% of the total power bought by these utilities.

In its petition, Mahavitaran argues that the average cost of power purchase from thermal power stations is Rs.3.30 per unit while the average per unit cost of power from all sources of renewable energy such as wind, solar and biomass is Rs.4.32 per unit.

In the current system of fixing tariffs, the burden of Rs.1 per unit is borne by all categories of consumers, including those below the poverty line, the petition said.

Industry lobby groups and experts differ.

“Mahavitaran’s move is against the spirit of the Electricity Act, 2003, which talks about phasing out cross-subsidies. Instead it is trying put an additional cross-subsidy on the industry,” said Arbind Prasad, director general of industry lobby group Federation of Indian Chambers of Commerce and Industry (Ficci), in an email response.

Industrial and commercial consumers pay a much higher tariff than the average cost of supply to cross-subsidise domestic, agricultural and consumer tariffs.

“Such a move will have an adverse impact on common consumers as industry will pass the burden onto consumers (eventually),” Prasad said about the petition.

Kameswara Rao, executive director and leader of the energy, mining and utility practice at audit and consultancy firm Pricewaterhouse Coopers Pvt. Ltd said: “By keeping domestic tariffs artificially low, we are not addressing the issue of inefficient use of power in our households. Inefficient use of power in homes may not be great burden for individual consumer but it puts huge burden on entire system.”

Ashwini Chitnis, a senior research fellow at the Pune-based think-tank Prayas Energy Group, which carries out research on energy-related policy issues, said the burden of the high cost of renewable power should be shared by all heavy consumers of power.

“The debate on who should pay for high cost renewable energy leads to hair splitting. One can argue why only so-called polluting industries should pay and why not customers who are the real beneficiaries of such industries,” Chitnis said.