Power bills of 1.65 crore consumers living in the eastern suburbs of Kanjurmarg, Bhandup, Mulund, etc, and the rest of Maharashtra are set to increase. The Maharashtra Electricity Regulatory Commission (MERC) has allowed high-end industrial consumers to avail cheaper supply from other utilities.
Two days ago, the MERC approved open access to Indo Rama Industries in Nagpur for getting 7MW from supplier other than the Maharashtra State Electricity Distribution Company (MSEDC). The company has applied for 50MW more.
Open access lets high-end users buy power at competitive rates from any other utility. It has to pay carriage fees for using different networks.
The MSEDC is preparing to challenge the order in the Bombay high court and the appellate tribunal for electricity. Indo Rama has filed a contempt notice against the state company.
The state power utility contended that when high-end consumers migrate, the cross subsidy to low-end users (100 to 300 units per month) will reduce and thereby hike their bills.
The MSEDC has the most number of below poverty line, agriculture (1.65 crore) and subsidising industrial/commercial consumers (15 lakh) than any other state in the country.
A senior MSEDC official said shifting of 100MW supply would mean an annual tariff hike of Rs60 crore. “If we continue to lose high-end consumers, who will subsidise the poorer consumers? We use our profits for reducing the bills in all categories. So, we want migrated high-end consumers to pay us cross-subsidy surcharge.”
The MSEDC would ask the court and the tribunal to maintain the current level of cross subsidy (Rs4,500 crore) as per the Electricity Act 2003.
It also wants to do away with the obligation of giving standby power at regulated rates to the migrated consumers in case they don’t get contracted supply from the new utility.
Meanwhile, the MERC is expected to allow another industrial major Ispat Industries (Nagpur) open access for at least 300MW supply. Applications for another 600MW are also pending for approval.