Electricity bills are likely to go up next month in Maharashtra as regulator MERC has increased the fuel adjustment cost (FAC) ceiling to 20 per cent from the present 10 per cent for power distribution companies.
"...The commission revises the average FAC ceiling to 20 per cent of variable tariff for all distribution licensees in the state," Maharashtra Electricity Regulatory Commission (MERC) has said in its order.
The revised FAC ceiling will come into effect (for the FAC allowable to be charged to consumers) from September onwards.
The FAC is a variable energy rate that can fluctuate each quarter with fuel and purchased power costs of suppliers.
After analysing the monthly FAC of all utilities, MERC had suo-motu proposed to increase the cap to 25 per cent as it observed under-recovery of the cost in recent past.
The state power regulator, however, relented only after the public hue and cry over its decision.
"...The commission has already clarified that there has to be a balance between the interests of the consumers and the utilities and the FAC ceiling has to be stipulated in such a manner that fuel cost incurred by the distribution licensees under normal circumstances is allowed to be passed to the consumers on a regular basis...," the order said.