Nagpur: Some media reports said the MSEDCL is increasing tariff to offset its mounting losses while a local daily said, in a first, MSEDCL proposes to cut power tariff for 5 years
Nagpur: As the new financial year approaches, electricity consumers in Maharashtra are bracing for a significant hike in power tariffs. The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has filed a multi-year tariff petition with the Maharashtra Electricity Regulatory Commission (MERC), seeking an additional revenue of ₹48,060 crore to offset its mounting losses, some media reports said.
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However, in a surprising twist, a local newspaper has reported that MSEDCL has proposed a reduction in energy charges for residential consumers, marking a potential first for the state. According to the report, the company has submitted a petition to MERC suggesting a drop in energy charges by 1-15% for over two crore residential consumers in the 2025-26 financial year. Additionally, the petition outlines a plan for tariff reductions ranging between 12% and 23% for the next five years, from 2025-26 to 2029-30.
The apparent contradiction between the immediate need for a tariff hike and the longer-term proposal for reductions has left consumers and industry experts puzzled. While the tariff hike is reportedly aimed at addressing revenue shortfalls driven by increased power purchase costs, coal blending due to domestic shortages, and inflation, the proposed reductions for future years hint at a possible easing of financial pressures in the long run.
As contradictory reports circulate, stakeholders are keenly awaiting clarification from MSEDCL and MERC. The true impact on consumers’ electricity bills remains uncertain, with many calling for transparency and a clear roadmap to ensure affordability and sustainability in Maharashtra’s power sector.
Some media reports said that the proposed tariff revision paints a mixed picture for consumers. While energy charges for the first 100 units may see a marginal reduction, the relief is negligible. For consumption beyond 100 units, the hike is more pronounced, with average increases ranging from 3% to 7%. The sharpest blow will be felt by consumers in the 100 to 300 units category, where tariffs are expected to rise by approximately 9.95%, impacting a majority of households.
MSEDCL has attributed the hike to various factors, including inflation, higher power purchase costs, and coal blending necessitated by a shortfall in domestic coal supply. Additional burdens such as increased costs from MSPGCL, PGCIL, and NPCIL, along with changes in law claims and consumer mix impacts, have also contributed to the proposed revision.
The company stated that industrial tariffs have been aligned closer to non-agricultural Average Cost of Supply (ACoS) to reduce their cross-subsidy burden. Similarly, efforts are underway to bring cross-subsidy levels across other consumer categories closer to non-agri ACoS.
If approved, the revised tariffs, set to take effect from April 1, are likely to strain household budgets while raising questions about the long-term sustainability of Maharashtra’s power sector. Consumers and industry stakeholders alike are keenly awaiting MERC’s decision on this crucial issue.
According to an energy expert, it is very unfair on part of MSEDCL to seek hike in energy tariff as already the consumers in Maharashtra are paying one of the highest charges in the country. Last year alone, the State witnessed one of the highest tariff hike wherein the increase was about 37 percent across board. On top of that for second consecutive year, the company is going for hike is beyond one’s understanding. What was expected from the distribution company was substantial reduction in the distribution losses that would have negated need for tariff hike which however is missing.
As to Time of Day (ToD) the power consumption during the day time, from 9 am to 5 pm, is going to be charged at lower rate but ToD usage reading depends on meters. The currently meters at households are not equipped for the same. In short, the move is meant to push affixing of smart meters at households to which people in Maharashtra are opposed, MSEDCL has filed its multi-year tariff petition with Maharashtra Energy Regulatory Commission (MERC) for covering-up the revenue gap for financial year 2022-23 and 2023-24.
The local newspaper report said that the highest tariff drop of 15% in 2025-26 is for lower-rung residential consumers using up to 100 units of electricity. Their tariff rates are expected to further drop by 19% in 2027-28 and 25% in 2028-29. For consumers in the 101-300 units category, which comprises maximum residential users, the drop in charges will be from Rs 11.06/unit to Rs 9.30/unit — a decline of 16% over a five-year period, said an official from the energy department (see box).
State is also wooing industry consumers by proposing a 3% reduction in tariff in three months, and an overall 11% drop proposed over five years till 2029-30. The objective is to ensure that industries do not move out of Maharashtra. The tariff for electric vehicle charging has, however, been proposed to be hiked by 35% in the next financial year to Rs 9.86/unit from Rs 7.30/unit.
According to MSEDCL Managing Director Lokesh Chandra, “never in the history of MSEDCL has tariffs been reduced.” He explained that the proposal was mainly due to a major switch to renewable energy projects which ensured cheaper availability of power, with the agriculture load being gradually shifted to solar too. This will eventually reduce the cross-subsidy burden on other high-end consumers, such as industry and solar, and thereby make their tariffs cheaper.
“Come April 1, MSEDCL consumers will see a graded reduction in electricity bills ranging from 12% to 23% over the next five years,” said Mahavitaran independent director Vishwas Pathak, adding that this is on account of the Chief Minister’s Solar Agriculture Feeder Project 2.0. “The solar power projects that will be operational in two years will provide electricity to farmers…and also benefit domestic and industrial consumers…” Under the CM’s project, 16,000MW of solar power will be generated in the state in the next two years. MSEDCL ‘s average electricity supply rate will reduce from Rs 9.45 to Rs 9.14 by 2029-30, he added.
