Nagpur: Electricity consumers, get ready to pay 5-10 percent more for electricity from April 1. In a decision taken on Friday late at night, the Maharashtra Electricity Regulatory Commission (MERC) agreed to a proposal by Maharashtra State Electricity Distribution Company Limited (MSEDCL and announced the out-of-turn hike, according to media reports.
It is noteworthy, that the last electricity price hike in the State was done three years back and as per the Electricity Act, tariff hikes happen once every five years. However, there is a provision for a mid-term hike as well. The average hike that MERC has approved comes to 2.9 percent for 2023-24 and 5.6 percent for 2024-25.
From the start of the new financial year, April 1, 2023, the new power tariff will come into force ending the curiosity about the hike.
For industry (HT category), the hike is a percent for 2023-24 and four percent hike for 2024-25. For the agriculture sector, the hike is a steep one. For the next two years, a nine percent hike has been announced. But this is just the average hike. The hikes differ from distributor to distributor.
The four distribution companies of Maharashtra, MSEDCL, BEST, Tata Power and Adani Electricity had sought this tariff hike citing coal price increase in their petitions as the main reason for the demand. The companies also mentioned the losses they had to bear during COVID and the shortfall in the availability of renewable power as the reason for the overall cost of power purchases shooting up. The discoms reasoned that in order to adjust the revenue gap after the increased power purchase cost a mid-term tariff hike was needed.
As per the procedure, once the distribution companies filed their petition, MERC conducted multiple meetings with all the stakeholders and then issued an order allowing an electricity tariff hike in Maharashtra. The new rates will be applicable from April 1, 2023.
In the past, during one year, the MERC order was delivered in the month of May, but the new tariff was applicable from April 1 onwards. MSEDCL had sought truing up of its accounts to the tune of Rs 67,644 crore as the same was needed to stay afloat. If the same is upheld, the hike would be 37 percent, some predicted. However, MSEDCL downplayed it and said the hike in real terms would translate into just Rs 2.55 per unit. The State-run distribution company, in its petition, had sought steep hike in rates to realise the actual charges for the power supplied to consumers, the consumer activist claimed that if the same was accepted in toto then power tariff might go up in the range of 25 to 30 per cent.
But, given the electoral compulsion as polls are round the corner, the present day rulers might not want to antagonise the voters and hence the power hike might be limited in range of 10 to 15 per cent at the most. The actual fluctuation in power bills would be known only after MERC releases its order on the MYT petition of MSEDCL. Consumer activists are already alarmed as if MSEDCL claims are accepted at its face value then power tariff in Maharashtra will overtake those of its neighbouring States.
A comparative analysis of the power tariff of MSEDCL and that of their counterparts in neighbouring states reveals that the difference is nearly 30 per cent and hence any more increase may hit the industrial development in Maharashtra hard. Right now the tariff of MSEDCL is highest in the country and base rate starts from Rs 5.36/unit to Rs 15.56/unit while the lowest in base rate is Andhra Pradesh where it is just Rs 1.9/unit while in top slab the lowest tariff is that of Gujarat which is just Rs 5.2/unit.