Power tariff cut by 20% for Maharashtra, except Mumbai Chittaranjan Tembhekar,TNN | Jan 21, 2014, 02.24 AM IST MUMBAI: The state cabinet on Monday approved a 20% power tariff cut for Maharashtra — except for much of Mumbai. The reduction is for all consumers — residential, commercial, industrial and agricultural — supplied by Maharashtra State Electricity Distribution Company Limited (MSEDCL), including those in Mulund, Kanjurmarg and Bhandup. It is not applicable in the rest of Mumbai since the remaining areas are supplied by BEST, Tata Power and RInfra. In the residential category, the benefit will be only for those who consume up to 300 units a month. The cuts will be across consumption slabs in the other categories. The decision came about three weeks after the Aam Aadmi Party cut power rates in Delhi and four days after the Congress did likewise in Haryana. With their eyes on the forthcoming general elections and the October assembly elections, politicians from Maharashtras ruling Congress were quick to start clamouring for a power tariff cut for the state. A cabinet source said chief minister Prithviraj Chavan has directed the administration to propose a tariff cut for the rest of Mumbai next week. Power experts and consumer activists say the tariff cut announcement is an eyewash. In September 2013, the government had imposed a surcharge and an additional fuel adjustment charge (FAC) on tariffs, which amounted to 20%, said an expert. These charges are to last till February. The governments tariff cut is applicable on existing charges, not what the rates will be once the surcharge and the additional FAC are removed. So, Mondays announcement amounts to nothing. But state power ministry sources contradicted the experts view, saying the hike imposed in September was stayed by the appellate tribunal for electricity and, thus, never imposed. The new tariffs will be effective once the Maharashtra Electricity Regulatory Commission (MERC) approves the cabinets decision, which is said to be a formality. The approval is expected within 10 days, which means the tariff cuts may be in place in February. Maharashtra has around two crore power connections, of which 1.56 crore are residential. MSEDCL connections in Mulund, Kanjurmarg and Bhandup number six lakh. The rest of the Mumbai Metropolitan Region — including Thane, Navi Mumbai and Kalyan-Dombivli — has 20 lakh power connections. The tariff reduction for the industrial category will bring major relief to industrial units as their power bills will come down to close to what industries in Gujarat and Karnataka get. Maharashtras industries had threatened a flight to the two neighbouring states. Since the cost of power is a major factor in manufacturing, after the tariff cut, manufactured goods may become cheaper in Maharashtra. Also, tariff reduction in the commercial category (malls and multiplexes) means these facilities may offer cheaper services. A cabinet source said to meet the revenue gap of Rs 706 crore per month, which will arise after the power tariff cut, the state will shell out Rs 606 crore and the Maharashtra State Electricity Board, the holding company of the MSEDCL, Rs 100 crore. Meanwhile, all cabinet ministers have demanded an audit of Mumbais power suppliers to examine the difference between their electricity production costs and tariffs so they can decide on price cuts for Mumbai. The decision for the state is historic, but a similar decision should be made for Mumbais consumers as well, said minorities minister Arif Naseem Khan.
Posted on: Tue, 21 Jan 2014 03:54:16 +0000
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