In a U-turn on multi year tariff (MYT) order, Maharashtra Electricity Regulatory Commission (MERC) modified its March 2025 ruling. As per the new decision, domestic power tariff is set to rise in Maharashtra, excluding Mumbai. Deciding on the revision petition filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL), the MERC was frank enough to admit to Discom’s contention that its previous order was erroneous and contained several omissions regarding policy decisions. MERC notified its decision on Discom’s review petition on Wednesday.

 

A cursory look at the order revealed that on every aspect of objections raised by MSEDCL, the MERC accepted errors in the computation of the calculations. Meanwhile, the energy experts — Sudhir Budhay and R B Goenka — said, “The domestic consumers will see 5 per cent rise in tariff from July 1, 2025, onwards, for consumption above 100 units. For the industry, the revision in solar power’s banking rules is almost a fatal blow.” MERC held hearing on MSEDCL revision petition on May 6 and 9. The order issued on June 25, 2025, ended the nearly one-and-a half months of suspense. For domestic consumer, as of now, the base energy charges are Rs 10.29/unit in 100-300 units category. The same are set to rise to Rs 11.10/unit. In 300-500 units consumption category, the rise will be from current Rs 14.55/unit to Rs 16.85/unit while for consumption of over 500 units, the rise will be from current Rs 16.54/unit to Rs 19.15/unit.

 

However, in a good news for domestic consumers, the tariff will reduce from April 1, 2027 when base charge will be Rs 10.65/unit after reaching Rs 10.80/unit (in 100-300 units slab) during year 2026. In commercial category, there is a marginal rise in base charges from Rs 8.52/unit (as of April 1, 2024) to Rs 8.90/unit from July 1, 2025 onwards. Same is the case of commercial consumer category as tariff will start reducing from the next control year, from 2026, when it will be Rs 8.51/unit in 2026 and to Rs 8.31/unit in 2027. As per Budhay, the MERC had projected an overall tariff reduction of 10% in FY 2025-26, with a cumulative reduction of 16% by FY 2029-30 in March 2025 order. But now the revised calculations in the review order show a smaller initial tariff reduction. The modified Average Cost of Supply (ACoS) is projected to decrease by 2.16% in FY 2025-26 relative to the existing tariff of Rs 9.45/unit. For the first time in history, MERC had altered its MYT order on such a massive scale, leaving the industry and consumers gasping.

 

What hurt the most as Budhay and Goenka contended is though the revision petition order has major impact on consumers, the MERC strangely disallowed public hearing. Not only did the MSEDCL revision petition not made public, even the stakeholders were not consulted as is the practice while deciding the application of Discom. The duo contended that it is rare to see MERC having domain experts from every field admitting to errors on such major scale. The MERC has modified key benefits to power consumers, and upheld position of Government-run Discom that claimed that there were manifest errors, right from computing capex, non granting extra O&M, grid support charges etc. The biggest sufferer, according to Buday, would be industries that had invested heavily in erecting solar units as they sought to take benefit of State policy on renewable energy.

 

As per the new order of MERC, the rules relating to banking of surplus power generated is being discontinued as sought by the Discom. Now, the Regulator say, the industries having 20 kw and above solar units will have to consume the extra power within the day time, 9 am to 5 pm period, the time when sun is shining bright. Now, MERC say, the energy banked during solar hours and normal hours shall not be drawn during Peak Hours, that is from 5 pm to 12 midnight when the demand is maximum. 

 

Revision in ToD hours SEO MERC has agreed with contention of Discom and rectified error in computation of Time of Day (ToD) hours wherein the rebate offered in earlier order for 12 midnight to 6 am is removed. The contention is Discom’s argument that it might not be possible for it to contract such huge amount of power in night and during day time it is having surplus power. The night-hour rebate stands removed to encourage load-shifting to solar hours. Banking provisions were aligned strictly with the existing DOA Regulations, which have specific rules for drawing banked energy from different ToD slots, as argued by Discom in its petition.

 

 

Biggest looser is the Hotel industry as it was granted industry tariff in earlier order. But post objection from Discom, MERC has rolled back the concession and put hotels back in commercial category. The MERC agreed with MSEDCL contention which referred to Electricity Tariff Refund (Difference between Commercial Tariff and Industrial Tariff) outlined in Maharashtra Tourism Policy 2024. In case hotels are in Commercial category, they will be eligible to get refund of differential tariff. Now, the benefit accruing to hotels with lodging facility in Marathwada and Vidarbha due to location advantage has been discontinued.