Mumbai: Consumer activists have opposed the increase in electricity tariff saying the actual hike would be more as the Maharashtra Electricity Regulatory Commission (MERC) allowed the distribution companies supplying power to consumers in Mumbai and Maharashtra to hike the tariff. The price hike has come into effect from April 1.
The hike was allowed owing to the shortfall in revenue due to the impact of Covid-19 pandemic, rise in the transmission charges and fuel cost. Activists opined that the hike will help the electricity distribution companies to mop up ₹39,567 crore in the next two financial years. They have announced to challenge the tariff hike.
BEST, which supplies power to one million consumers in the island city has increased its tariff by 5.07% this year and 6.35% in 2024-25. Tata Power, which supplies electricity in eastern and western suburbs of Mumbai and in the jurisdiction of Mira-Bhayandar, has been allowed to increase 11.9% and 12.2% in two years respectively. Adani Electricity, which supplies the power to 2.6 million consumers in Mumbai suburbs, has been allowed to increase the tariff by 2.3% and 2.1% in 2023-24 and 2024-25 respectively.
State-owned Maharashtra State Electricity Distribution Company Limited, which is the largest supplier of power across the state including Bhandup-Mulund, Thane, Navi Mumbai, has been allowed to revise the tariff by 2.9% this year and 5.6% next year.
{{/usCountry}}State-owned Maharashtra State Electricity Distribution Company Limited, which is the largest supplier of power across the state including Bhandup-Mulund, Thane, Navi Mumbai, has been allowed to revise the tariff by 2.9% this year and 5.6% next year.
{{/usCountry}}The MERC has stated that the companies will be able to recover the revenue gap of ₹39,567 crore through the revision in two years. The regulatory body has also recommended formation of a new company for agricultural consumers to establish energy consumption accountability.
Pratap Hogade, president, State Electricity Consumers Organisation, said that the power companies have been misleading the people on the percentage of the hike.
“The hike given by the MERC is bogus, illegal and misleading and we are moving the electricity appellate authority, New Delhi, against it,” he said.
“Though the state government had said that it would be around 11%, the hike allowed by MERC is actually 21.65% as the companies have been allowed to mop up ₹39,567 crore in next two years from the hike. The hike in electricity charges in 20 to 52% and fixed charges upto 10 and 20% in two years respectively,” added Hogade.
He said that the hike is illegal because the MERC has overlooked the strictures passed by internal auditors and the CAG audits. “The auditors have clearly stated that the base on which the hike has been calculated is wrong. They also have pointed at the inflated figures of agricultural consumption of the power. The power companies have been fudging the figures,” he said.
Power expert Anil Gachke said that the corruption in state-run companies, leakages and pilferage are the real causes of the tariff hike. “The leakage of power and outstanding of bills, apart from the rampant corruption in government companies are the reasons for the revenue gap to the discoms. Other states like Gujarat, Madhya Pradesh, Karnataka give power at much cheaper rates to domestic consumers and even to industries, then why should Maharashtra be the exception,” he said.
Vishwas Pathak, independent director of MSEDCL and BJP leader, said, “The MERC has restricted the hike between 2.9% and 5.6% against the projection of it to be whopping 37%. The hike is the result of the poor management of the coal because of which the generation cost has risen multifold forcing the hike.”
Electricity distribution companies said the hike is rational.
“Our relentless efforts to increase renewables and optimising power purchase costs have helped us in keeping the hike least across the state. The volatile fuel prices led tariff hikes across the country. We continue to serve our customers with the most competitive tariffs across majority of the Tariff categories,” Mr Kandarp Patel, Managing Director, Adani Electricity.
A Tata Power spokesperson said, “We are committed to providing power at competitive tariffs to our 7.5 lakh consumers across all segments. In our petition to MERC, we had asked for rationalisation of tariffs and our assumptions were based on factors such as optimised power purchase costs, an increase in renewable energy share in our portfolio, and sourcing cheaper power from the open market.
“While rationalising the tariff, in some categories the tariff may go up for the consumers. Based on our assessment, if customers tariff gets impacted, it will get suitably adjusted in fuel adjustment charges in the future months due to optimised power purchase costs, etc. This will also be suitably taken up with the honourable commission to modify the tariff so as to maintain competitive position in the market.”