Countering the popular perception about two per cent drop in power tariff in Maharashtra, Pratap Hogade, energy expert, claimed that citizens should not break into celebrations as the concession would not translate into more than 0.3 per cent. The reading of Multi Year Tariff petition of Maharashtra State Electricity Distribution Company Limited (MSEDCL) it seems is erroneous. As per orders of Maharashtra Energy Regulatory Commission (MERC), Hogade said the concession consumers might get ranges between 1 and 4 per cent.

 

The current average power tariff for MSEDCL consumers in Maharashtra, excluding Mumbai, is Rs 7.28/unit and it would come down to Rs. 7.26/unit. This means there is going to be reduction of 2 paise per unit, which translates into concession of just 0.3 per cent, he claimed further. MERC had last year approved the MYT petition of MSEDCL and the new tariff that would increase or decrease every financial year is meant for a period of five-years. The order was released by MERC on March 30, 2020, and in first year that is year 2020-21 the consumers felt burdened after tariff increased and it coincided with onset of summer season when consumption tends to be high. Further during the summer period, the country was under lockdown that led to all time high consumption in households leading to tariff shock.

 

Hogade claimed the claims of 4 per cent reduction in tariff is bit misleading and citizens might end-up on wrong side in case of consumption on higher side hoping to make most of concession. The actual benefit to citizens would not be more than 0.3 per cent on an average since there is no corresponding reduction as yet in the rates of fuel adjustment cost (FAC).

 

Further Hogade said in future, MSEDCL is going to approach MERC for relook at the tariff, may be in April 2022, and therefore during the remaining control period for year 2023-24, 2023-25 citizens should remain prepared

for shock in case the rates are jacked-up.

 

In fact, Maharashtra Veej Grahak Sanghatana, a consortium of various industries and citizens advocacy groups, has again asked for rationalisation of power tariff in Maharashtra, saying they are the highest in the region.

The tariff for households, industrial, commercial and agriculture are steepest in Maharashtra, and in fact industrial rate is higher in range of 10 to 40 per cent compared to neighbouring States. Against this background, a softening of tariff by 0.3 per cent is  simply insignificant.

 

Hogade said MSEDCL needs to reduce theft and transmission losses to ensure competitive tariff. At the same time, the discom needs to take care of its rising administrative cost and increase plant load factor to ensure 24 hours power supply to all sector.

 

 

The happy scenario of a bit reduction in power tariff in Maharashtra may be short lived since Maharashtra Energy Regulatory Commission (MERC) is yet to finalise the Fuel Adjustment Cost (FAC) that plays a major part in arriving at correct picture. There is a chance in formula as to calculation of FAC from monthly to annual.

 

So when MSEDCL would opt for truing-up of its accounts, the FAC factor would reflect and citizens would end as loosers as the company would recover the additional cost it incurred.