MSEB's reaction has come in the wake of Maharashtra Electricity Regulatory Commission's recent tariff order asking the board to hike PLF at 75 per cent.

MSEB has made it amply clear that "the transit loss in coal is not only due to water conservation but also because of other reasons, which are entirely beyond its control."

MSEB needs nearly 29 million tonnes of coal annually for its thermal power stations mainly situated in the Vidarbha region. It has said that neither Coal India nor Indian Railways guarantee the quantity of coal delivered at the power plant site. "These entities being monopolies, MSEB has very limited bargaining powers and hence has to accept the existing risk sharing terms."

MSEB sources told The Financial Express that its contracts with the coal mines and the railways does not provide for any recovery from either coal mines or the railways. This results in the MSEB bearing these transit losses completely.

MSEB has said that disallowing the transit loss will affect "its commercial viability." The transit loss is on account of the weigh bridge error. In addition to this, the fresh mined coal contents surface moisture which gets evaporated in transit and the loss in weight coantributes to the transit loss.

Moreover, surface moisture contents if not evaporated in transit, get evaporated while in storage and this loss is reflected as storage loss or loss in inventory. MSEB has mentioned that transit loss which is inherent feature of the coal business, is termed as "transportation risk" in independent power project contract and is accounted for coal accounting.

MSEB, while stressing the need for such an arrangement, has pointed out that the Hindujas had signed the fuel supply contract with Coal India and the railways.

In a related development, MSEB has projected a net power purchase of 10,755 million units from the National Thermal Power Corporation (NTPC) for the current fiscal. However, it has pointed out that "any increase in the NTPC power will ultimately affect the commercial balance of tariff revision and MSEB returns will have paper value."