The Maharashtra Electricity Regulatory Commission (MERC) on Friday allowed the Maharashtra State Electricity Board (MSEB) to hike its power tariffs by four per cent, which would mean an additional mop up of Rs 452 crore for the cash-starved board.
The original proposal submitted by MSEB had sought a 19 per cent hike to shore up its revenues by Rs 1,456 crore. The MERC also allowed the levy of a transmission and distribution (T&D) loss charge on all consumers with effect from January 1.
The commission, said the T&D charge was aimed at creating awareness among consumers. In the current fiscal, the MSEB has incurred an expenditure of Rs 538 over the estimated figure.
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The board, in its submissions to the MERC, had attributed the rise in its annual expenditure to growing power purchase payments from utilities such as the National Thermal Power Corporation (NTPC) and the National Power Corporation (NPC).
Adding to the MSEB's woes are its rising dues. The quantum of arrears has zoomed to over Rs 5,212 crore, of which Rs 1,500 crore is from the agricultural sector alone.
MSEB's actual production cost per unit of electricity is Rs 3, against which its tariff for the agricultural sector is as low as 42 paise per unit to farmers, while high tension consumers are charged Rs 5.40 per unit.
It has witnessed a loss in revenue as well. It's revenue dipped by Rs 1,339 crore due to reduction of metered sales.
According to MSEB's proposal to MERC: "Even if there is no increase in expenses during 2001-02, the revenue from existing tariffs will be Rs 1,326 crore less than the revenue requirement." The board has had to face a sharp decline in usage of electricity by high tension (HT) consumers. The board has now contented that as per current trends, HT consumers will use 4.8 per cent less electricity against the earlier anticipated growth of two per cent in usage by HT consumers. The rise in expenses has widened the gap between annual revenue requirement and revenues expected from existing tariffs to Rs 1,456 crore. This gap needs to be covered by a tariff hike.
In its next tariff order, the MERC plans to differentiate between various circles or zones for the T&D loss charge, based on losses exhibited by the circle or zone in question, and has directed MSEB to submit zonal level energy audits for all zones on a monthly basis, along with action taken report each month.
The commission has requested the state government to make a separate budgetary provision for payment of electricity bills while drawing up budgets of local bodies as against the existing practice of clubbing electricity payments with other miscellaneous expenses. Interestingly, the state government had opposed MSEB's proposal to increase the tariff for consumption in the agricultural, domestic, powerloom and other sectors in the state.
In an affidavit filed before the MERC, the government said it feared that a law and order situation may arise if the hike proposed by the board is granted by the commission and brought into effect.