The Act has drawn out the eligibility criteria and process for setting up the commission. It has also defined the role of these commissions.

Apart from the most important task of rationalising power tariff structure in the state, the three-member SERC will have several other functions. It will also regulate working of the licensees and set standards for the electricity industry in the state, including standards for quality of power, continuity and reliability of service. It will also determine the tariff for the use of transmission facilities.

The commission will also regulate the power purchase and procurement process of various power companies, including transmission and distribution companies and the wheeling charges for the use of state transmission facilities. It will also assist the state in formulation power policy.

The need for such commission was realised years ago. But, in December 1996 all political parties unanimously agreed to formation such commissions at the Centre and state levels. The Electricity Regulatory Bill which was to make establishing of these bodies mandatory was opposed in the parliament and subsequently diluted leaving the decision on the states. Hence, the Act gives the options to state for establishing the SERC.

Though the SERC will structure the power tariff in the state, the proposed tariff hike will be out of its preview and will be decided only by the state government. The Maharashtra State Electricity Board has already submitted the proposal to the department of energy for increase in power tariff for various category, however, the government has yet to take a decision.

As per the guidelines, the SERC is being set up by the select committee which was appointed last week. The three-member panel include the former Lok Ayukta and the high court justice PS Shah, chief secretary of the state P Subramanian and a member of the Central Electricity Authority (CEA) DV Khera.