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Uniform electricity tariff promise difficult to fulfil, say experts

mumbai Updated: Feb 10, 2012 01:14 IST
Dharmendra Jore
Dharmendra Jore
Hindustan Times
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Ensuring uniform power tariff in the city - a promise made by the Congress and the Nationalist Congress Party (NCP) during their campaigning - could be difficult to achieve due to economic and regulatory reasons.

While releasing the Congress-NCP civic election manifesto on Wednesday, Ajit Pawar, deputy chief minister and head of energy department, had said that the state was mulling uniform tariff for city's 39 lakh consumers. It would include 10 lakh consumers from the Brihanmumbai Electric Supply and Transport (BEST), which is controlled by the Brihanmumbai Municipal Corporation (BMC).

At a public hearing of the Maharashtra Electricity Regulatory Commission (MERC), VP Raja, chairman, said that government subsidy for all distribution companies would alone make uniform tariff possible in the city, adding, "But, I think the government cannot afford that."

City consumers have been demanding uniform tariff owing to the disparity in the tariff being charged by four companies. While Tata power is the cheapest, Reliance Infrastructure's rates are the highest. BEST supplies power to the island city, while Reliance Infrastructure (RInfra) reaches majority of the suburbs. State-owned Mahavitaran caters to eastern suburbs such as Kanjur Marg, Bhandup and Mulund and rest of Maharashtra.

Power expert Sandeep Ohri, present at the hearing, said: "How can a state government have uniform tariff for just one city? It would become even more difficult because the largest consumer base [of Mahavitaran] remains outside the city."

Ohri said that only a certain provision in the Electricity Act, 2003, allows the government to provide subsidy. "But then uniform tariff will defeat the provisions of the Act which promotes competition between utilities and offers consumers the right to select their supplier."

Pawar had said that though the government had tried in the past, the MERC did not approve of the idea. Pawar, who also heads finance department, did not discuss the subsidy though. A finance department official, requesting anonymity, said: "The state, which is reeling under a heavy debt of more than Rs2 lakh crore cannot afford to spend money on subsidy for a section of power consumers."