Nagpur: On the very first day of the new financial year 2023-24, Maharashtra Electricity Regulatory Commission (MERC) issued the order regarding retail electricity tariff of Maharashtra State Electricity Distribution Company Limited (MSEDCL), inviting sharp criticism from the consumers’ organisation Maharashtra Veej Grahak Sanghatana.
MERC, in its order, stated that with ‘significant increase’ in overall average cost of power supply, the increase in tariff for various categories was ‘inevitable’. It added that the overall average tariff hike for 2023-24 would be ‘only 2.9 per cent’ and that for 2024-25 would be ‘5.6 per cent’ as against MSEDCL’s claim of 14 per cent and 11 per cent respectively.
Gold Rate
29 May 2025
However, Maharashtra Veej Grahak Sanghatana alleged that the average hike in tariff was above 21 percent. Accusing MERC of ‘imposing massive tariff hike’, the consumers’ organisation expressed its intention to appeal against the order before the Appellate Tribunal for Electricity (APTEL). In its order, MERC stated that it had determined a revenue gap of Rs 39,657 crore as against MSEDCL’s estimate of Rs 67,643 crore. The Commission added that the revenue gap ‘needed to be recovered’ through revision in tariff over 2023-24 and 2024-25.
As per the order, the overall average hike in electricity tariff for High-Tension (HT) industry would ‘marginally increase by around one percent’, whereas in case of Low Tension (LT ) industry, the average price of electricity and Average Billing Rate (ABR) would ‘actually reduce by around one percent’ for 2023-24. In case of commercial category (HT and LT), the average electricity tariff and ABR would ‘reduce by around one per cent’ during 2023-24, it added.
Speaking of ‘tariff rationalisation’ for domestic consumers’ category, MERC increased the energy charges for domestic/residential category consumers. The order made a statement, “But, (the Commission) has ensured that such revision in energy charges is minimal, particularly for consumers with consumption below 100 units per month, with marginal increase in fixed charges for all the consumers.”
Further, MERC opined that there was ‘urgent need to review/revisit’ the tariff structure for domestic categories including need for continuation of the telescopic benefits, particularly for higher end consumption slabs. While the Commission has retained rebates and discounts of variable nature, it accepted the concept of fixed cost recovery and increased the Fixed/Demand Charges. The recovery from Fixed/Demand Charges is ‘around 16-17 per cent of total revenue’.
Also, it highlighted the need for review of agricultural tariffs. However, the tariff hike has not gone down well with consumers. Pratap Hogade, President of Maharashtra Veej Grahak Sanghatana and energy expert, issued a statement accusing MERC of ‘imposing massive tariff hike’ on consumers. He dubbed the order as ‘misleading’ and ‘illegal’, and expressed intention to appeal against it before APTEL.
Hogade alleged that the average hike in tariff was over 21 per cent. “Given the average, the hike for 2023-24 is 7.25 per cent, and that for 2024-25 is 14.75 per cent. Scrutiny of Energy Charges reveals that it is 10- 52 per cent. The hike in Fixed Charges is 10 per cent in the first year, and 20 per cent in the second year,” he stated.
According to Hogade, MSEDCL included Fuel Adjustment Cost (FAC) in existing tariff in its proposal and MERC also considered the same. “This is an attempt to mislead the consumers. Any comparison should be done considering the difference between the previous order and the new order. However, MSEDCL and MERC both compare the rate in the last month and the new rate. Due to this, the actual difference in tariff and real picture of tariff hike is not comprehensible for common consumers,” he alleged.
