The MSEB was formed on 20 June 1960 under Section 5 of the Electricity (Supply) Act, 1948.

In 1998 it was the second largest electricity generating utility in India after National Thermal Power Corporation.

The company's predecessor was the Bombay Electricity Board which was formed on 6 November 1954 and operated up to 31 March 1957 when it was renamed to Maharashtra State Electricity Board which operated until 19 June 1960.

The result of a collaboration between the MSEB and Enron was the Ratnagiri power plant.

Maharashtra constitutes 13% of the total installed electricity generation capacity in India, which is mainly produced from non-renewable resources, using fossil fuels such as coal and natural gas.