Activist seeks CM’s intervention to retain industrial power tariff at August ’18 level

Source: The Hitavada      Date: 03 Jan 2019 10:15:01


Staff Reporter,

Industrial power tariff in Maharashtra is approximately 20% to 35% higher as compared to all
other adjoining states

Tariff should not be hiked further as it will have adverse impact on industrial sector, said Pratap Hogade

Increase in efficiency of Mahagenco and extending Plant Load Factor to 80% will avoid excess burden, the activist suggested

Expressing anguish over steep hike in industrial power tariff, activist Pratap Hogade has urged the Chief Minister Devendra Fadnavis to personally intervene into the matter and roll back the hike and bring it to August 2018 level. Hogade also demanded  Rs 3,400 crore subsidy for this purpose while requesting not to burden the industries with costly power.  The earlier electricity tariff declared by MERC vide its order in November 2016 should be retained upto March 2020, he demanded while asking all Industries associations to raise the similar demand before the Government.

As promised by State Government, Electricity Tariff should not be further increased till it comes at par with adjoining states and for that, all necessary and stringent measures should be implemented, the activist suggested.  Industrial power tariff of Maharashtra State Electricity Distribution Company Limited (MSEDCL) at present approved by MERC is approximately 20% to 35% higher as compared to all other adjoining states, Hogade claimed. Electricity rates of domestic, commercial and agricultural categories have also reached highest level in the country, he stated while apprehending adverse impact on industrial sector.

In September 2018, MERC had approved Rs 20,651 crore that comes to average 15% hike in tariff. In next two years, six per cent which corresponds to Rs 8,268 crore are being recovered through tariff hike. Additional burden is regulatory assets. This amount (Rs 12,382 crore) will be recovered after April 2020 with interest from all the consumers, Hogade stated while dubbing the entire hike as “unaffordable.” This highest level of tariff is causing heavy losses to Industries and to the revenue of Government of Maharashtra also, Hogade claimed while requesting Chief Minister Devendra Fadnavis to instruct the power utility to withdraw the said tariff hike completely.

Previous Government had taken a decision to provide a subsidy of Rs 600 crore every month to MSEDCL from January 2014 to keep the energy rates at affordable levels. Now, the requirement to keep industrial tariff at earlier level will be around Rs 150 crore per month from September 2018 to March 2019 and around Rs 200 crore per month from April 2019 to March 2020. Thus for these 19 months, a sum of Rs 3,400 crore will be required so that industries are protected from this unexpected and unaffordable power tariff hike.

Due to inefficiency and higher production cost, the distribution utility MSEDCL has to pay Re 1 per unit to Mahagenco and Ratan India etc for power purchase, Hogade claimed. This has an impact of Re 0.50 per unit on the tariff of all the consumers in the State. Increase in the efficiency of Mahagenco and increase in Plant Load Factor to 80% can avoid this excess burden, he suggested.

According to the activist, actual distribution losses are 30 per cent or more. The burden of additional distribution losses in consumers tariff is Re 1 per unit. Burden on MSEDCL is Rs 10,000 crore per annum. Actual real distribution losses should not be above the limit of 12%, he suggested.

The distribution utility (MSEDCL) has 24x7 availability of power. But there are on an average two hours power failures across State due to local interruptions such as transformers failure, breakdowns, overhead wires breakdowns, poles collapse, voltage problems etc. Therefore, MSEDCL is losing yearly revenue of Rs 6,000 crore unnecessarily, Hogade claimed while seeking urgent rectification.

The demands

Retain earlier tariff approved by MERC upto March 2020

No hike in power rates till it comes at par with adjoining states

Provide Rs 3,400 cr subsidy to MSEDCL to reduce burden on industries

Improve efficiency of Mahagenco to reduce power generation cost

Reduce distribution losses and bring it down to below 12%

Make public report of “Agricultural Consumption Fact Finding Committee” to determine electricity consumption and distribution losses

Bring down capital expenditure, higher O and M expenses of Mahagenco and MSEDCL

Provide uninterrupted power supply across State