Consumers in for a shock: MSEDCL mulls 5.8% hike in power tariff



Nagpur: Power consumers in the State are in for a shock as MSEDCL is contemplating a 5.8 percent hike in tariffs for the current fiscal year, 2020-21. If the proposal is approved, the hapless small consumers could be hit hard with financial burden. On the contrary, the influential consumers are being “blesssed” by the MSEDCL. As per MSEDCL proposal, the consumers utilising less than 300 units of power, would face the hike of 5.8 percent in power tariffs. Consumers utilising more than 300 units are being spared of the tariff hike.

During the biannual hearing of review petition by Maharashtra Electricity Regulatory Commission (MERC) for the fiscal years 2018-19 and 2019-20, the loss by power company was pegged at Rs 20,651 crore. Subsequently, MERC had allowed recovery of Rs 8,268 crore in a period of two years. Rest of the amount, Rs 12,382 crore, was to be recovered in future. In the petition, the MSEDCL had appealed inclusion of recovery of total 10 years. The power distribution company had shown accumulated revenue loss of Rs 60,313 crore from the year 2017 to 2024-25. Hence to recover the losses, MSEDCL has proposed to burden consumers utilising less electricity. The Discom has claimed that even though the tariff hike of 5.8 percent is for fiscal year 2020-21, the hike would be around 3 percent thereafter.

In a major shock to consumers of crisis-hit MSEDCL, the state electricity utility has proposed a 5-6 per cent increase in tariffs for the current fiscal year to recover the revenue gap of over Rs 30,000 crore. Power is purchased from MSEDCL according to “KvH.” But wnen it comes to subsidy to industrial and commercial consumers, the subsidy is proposed in accordance with “KvH.” This has been opposed and objected to by power sector expert R B Goenka. NCP MLC Prakash Gajbhiye too has strongly opposed the proposed power tariff hike.

Current and proposed domestic tariff (except other charges):

Units                     Current                Proposed tariff (2020-21)

1-100                     3.05 paise            3.30 paise

101-300                6.95 paise            7.30 paise

301-500                9.90 paise            9.90 paise

Over 500              11.50 paise          11.50 paise