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You will have to pay more for power sops given to industries

mumbai Updated: May 17, 2013 01:19 IST
HT Correspondent
HT Correspondent
Hindustan Times
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About 1.5 crore residential consumers of Mahavitaran will pay more for electricity because of the state power regulator’s recent decisions.

The Maharashtra Electricity Regulatory Commission (MERC) has allowed industries that have captive generation plants to bank their power with Mahavitran, the state power generator, and draw it back for their use later. In a losing situation for Mahavitran, the new regulation allows industries to bank power with the state generator at a certain rate and buy it back even when the market price is lower.

Mahavitaran said unwarranted regulation would impact residential consumers. “Since there is no mechanism to know in advance when industries would draw power from us, we will have to pay more for procuring power, or enforce power cuts in non-industry areas,” said a senior Mahavitaran official.

Banking was allowed 2004-5 onwards as there was acute shortage of power in the state, and it helped Mahavitaran reduce deficit. But Mahavitaran asked MERC to stop it when it became power-sufficient earlier this year. MERC decided against Mahavitaran when Pune’s ISMT Ltd asked it to continue banking.

In another decision which is set to impact consumers, Mahavitran has allowed users, who are connected with renewable power generators in addition to its supply, to pay only 25% of applicable cross-subsidy surcharge. The company fears a bigger impact if high-end users switch to renewable sources in the near future. In any power utility, high-end consumers pay more to cross-subsidise for low-end consumers. But when high-end consumers change over to other company, the cross-subsidy mechanics gets disturbed.

Mahavitaran said it was still assessing the total impact, which they will recover from consumers. It will challenge the MERC orders before higher authorities saying the Electricity Act, 2003, did not provide for banking of power and the commission did not have jurisdiction to decide in such matters.