The Maharashtra Electricity Regulatory Commission (MERC) on Thursday asked an electric co-operative promoted by a Congress leader to pay in advance the monthly bill for buying power from state-owned Mahavitaran or buy power from another supplier.

The Balasaheb Vikhe-Patil promoted Mula Pravara Electric Co-Operative Society in Ahmednagar district is likely to lose its distribution licence because procuring electricity at cheap rates from the open market is not easy for any distributor.

The society may have to surrender its business to the state company if it fails to get adequate supply.

The Mula Pravara society hasn’t paid outstanding dues of about Rs 2,000 crore to Mahavitaran. MERC will hear the case related to dues from March 2.

On Thursday, MERC admitted a plea filed by Mahavitaran and asked the society to pay up in advance the amount (Rs 20 crore) through letter of credit every month.

This is the first time in recent history that any such order was passed against a politically connected cooperative.

A distribution licensee for Shrirampur tehsil in Ahmednagar district, the society did not pay dues since 1977. Started in 1971, the society buys a monthly supply of Rs 18 to
20 crore from Mahavitaran but has been refusing to pay the later at MERC-approved rates. It pays Rs 2-3 crore every month to Mahavitaran.

MERC, in its 2004 order, had recommended that the society’s assets be transferred to the state company in lieu of the dues. A year ago, Mahavitaran issued disconnection notice on the cooperative but political leaders managed to get the order stayed.

MERC had asked the state government to submit its stand on the issue.