Mantralaya sources told The Financial Express that the government have also pointed out that its decision to delegate power under section 22 (2) (n) of the Central Electricity regulatory Commission Act, 1998 was with the view to arrive at a solution. The government made it clear that it has kept this particular order in abeyance as the matter was being looked into by the MERC.

The government made its stand clear in an affidavit filed in the Bombay High Court on a writ petition filed by the Tata Power challenging the state government's move in this regard. Tata Power had said that the government had achieved a finality on the long pending issue of payment of standby charges through the March 22 order and MERC had no powers to decide upon the issue which had been settled in the past.

The Bombay High Court, which was to hold a final hearing on the Tata Power writ petition on January 25, has postponed it to February 1.

The government has said that although the it had issued order on March 22, 2000, BSES had been demanding its review on the grounds that the concerned orders had not resolved various other issues raised by it. BSES, which had contributed nearly Rs 30 crore to Tata Power towards standby charges last year, had referred this matter to MERC challenging the order.

The government has reiterated its stand that it was aware that the loss-making MSEB needs liquidity and thus was quite optimistic that the solution would be found out soon once the MERC gives its ruling.