MERC approves 5.75% electricity tariff cut for MahaVitaran consumers

Industry tariffs made competitive with neighbouring states

Nearly 22.5 million consumers of the Maharashtra State Electricity Distribution Company (MahaVitaran) will get reprieve in their electricity tariff with effective from June 1.  The Maharashtra State Electricity Regulatory Commission (MERC) has approved a tariff cut of 5.75% against MahaVitaran's proposal for 7.94% rise for 2015-16. The overall tariff reduction works out to 2.44%. The industry consumers, who were repeatedly complaining about higher tariff compare to the neighbouring states, including Karnataka, Andhra Pradesh, Telangana and Madhya Pradesh, have been provided much-needed relief to stay competitive.

In its order on MahaVitaran's multi-year tariff proposal for the fiscal year 2015-16, MERC has approved a cumulative revenue surplus of Rs  3,376 crore for 2015-16 as compared to cumulative revenue gap of Rs 4,717 crore projected by the former. MERC has approved MahaVitaran's average cost of supply (ACoS) to Rs 6.03 per unit for 2015-16 against Rs 6.87 per unit.
 

Taking serious note of the views expressed by industries that tariff for high tension (HT) and low tension (LT) consumers are higher compared to neighbouring states, MERC has brought down energy charges in a range of Rs 0.40 per unit to Rs 1.21 per unit (depending upon consumer sub-category), with a marginal increase in demand charges in the range of Rs 0.03 per unit to Rs 0.04 per unit. 

For HT industry express feeder consumers, the tariff has been reduced by 14% to Rs 7.21 from Rs 8.41 per unit. For HT non-industry feeder consumers it has been brought down to Rs 6.70 from Rs 7.60 per unit, a 11% cut and for HT seasonal consumers to Rs 7.80 from Rs 9.35 per unit, a 16% decrease. 

MERC said the reduction in tariff was done due to the significant increase in availability of power in the state and with projected revenue surplus of MahaVitaran. 

It said it hopes that the tariff cut will spur the industrial growth in Maharashtra. 

Tariff for HT commercial has been reduced by 7-10%. The HT commercial consumers on express feeder will be charged Rs 11.15 against Rs 12.54 per unit and for HT commercial consumers on non express feeder the tariff has been reduced to Rs 10.62 from Rs 11.80 per unit. At the same time, tariff for low-end commercial category (below 20 kW) has been marginally increased by 1%. MERC hopes that these lower tariffs will be helpful for growth of service and hospitality sector in the state, thereby creating employment. 

As far as LT residential consumers with monthly consumption of 1-100 units, the tariff has been reduced by 2.59% to Rs 3.76 from Rs 3.86 per unit and for LT non residential consumers of 0-200 units to Rs 6.60 from Rs 6.70 per unit, a decrease of 1%. However, the tariff has been marginally increased for the 101-300 units consumption slab. 

Recognising the difficulties and hardships being faced by agriculture consumers across the state, MERC has mrginally increased the tariff for metered agricultural consumers to Rs 2.58 from Rs 2.52 per unit. However, in order to encourage the metering of un-metered agriculture connections, it has increased the tariff of un-metered connections to make the conversion of un-metered to metered connections attractive and thereby avail the benefit of lower tariff. 

MERC has not considered "unsubstantiated" increase in agriculture sales for the second half of FY14-15 projected by MahaVitaran leading to disallowance of Rs 5,331 crore in power purchase expenses. The transmission charges have been reduced to Rs 2,693 crore. 

MERC has reduced the tariff for Railways by 10% and hopes that this may encourage expansion/electrification of rail routes in the state and strengthen the transportation infrastructure. Also, MERC has created a separate category for ‘Metro / Monorail’ as these new additions to public transportation have recently started in the state with a per unit tariff of Rs 8.46.

MERC has disallowed Rs 1,909 crore claimed by MahaVitaran towards delayed payment charges payable to generating companies and transmission licensees. It has expressed serious concern regarding the practice of delaying the regular payment which subsequently attract Delayed Payment Charges for various stake holders.