A Tale of Two Cities Power tariff lesser in Mumbai than in Nagpur despite power generation in Vid

 

 

 

THERE is simply no comparison between Mumbai and the second capital of the State, Nagpur, and Maharashtra Government is making sure that the difference between them remains intact. The wide gap between per capita income of two cities is miles apart. It is well known. But what is under the wraps is that Nagpurians are paying on higher side for using power than their affluent counterparts in Mumbai. It might come as a surprise, but power tariff is cheaper in State capital than what Maharashtra State Electricity Distribution Company (MSEDCL) charges from its consumers in Nagpur. It sounds weird given the vast differences in purchasing power of those in city and those in metropolis. Those in Vidarbha can say they are subsidising electricity supplied to Mumbai metropolis. The consumers in Mumbai are enjoying the perks as they are supplied electricity by private companies, BEST and Adani, whereas in Nagpur and rest of Maharashtra, the people have no choice but to rely on State-run MSEDCL. Call it quirk of fate or deliberate ‘taxation’, MSEDCL’s charges for power tariff are one of the highest in the country, and they are proud of the fact for maintaining consistency on that count for year altogether. But what rubs is that maximum power that State consumes, including that in Nagpur that despite sitting on power keg, maximum power is generated in Vidarbha and they are forced to shell out maximum for power consumption.

 

 

Compared to the demand of 2884 MW in Mumbai, as of August 9, the generation locally was just 1469 MW. So the deficit of 1215 MW was bridged by sourcing power generated in other region. Against this in Nagpur district alone, the installed power generation capacity is 3530 MW whereas consumption in Nagpur city has not even crossed 1000 MW. Logically since the transmission losses here is quite less, the people of Nagpur and Vidarbha in general should have gotten power at concessional rates, after adjusting the transmission losses. But the logic in case of Maharashtra works in anti-clock wise manner. For Mumbai, power is supplied from long distance and yet the consumers there get tariff which is lower compared to one in Nagpur. A cross comparison would suffice as in the highest zone, that is 1000 units and above consumption in case of residential use, the tariff charges comes to Rs 17.79/unit. In Mumbai, BEST charges Rs 13.70/unit while Adani charges just Rs 10.75/unit.

 

When ‘The Hitavada’ tried to investigate, it talked to experts in energy field and they pinned the blame on cross subsidy to mismanagement in MSEDCL but mostly on State Government for its reluctance to set its house in order. R B Goenka, Advisor, Energy, VIA, said the higher tariff in Nagpur is solely on account of cross subsidy that MSEDCL has to bear on account of losses incurred in power supply to agriculture sector. Since distribution companies in Mumbai city are excluded from that burden their tariff is on lower side and this benefits consumers in Mumbai while those in Nagpur have to pay extra charges. Time and again the fact was pointed out to Maharashtra Electricity Regulatory Commission (MERC) and also Maharashtra Government about the injustice being meted out to people in Nagpur and Vidarbha but no relief has been granted till date. Goenka said he and others have been suggesting Government to form a separate company for supplying power to agriculture sector and free MSEDCL from that burden as this would allow the latter to become competitive.

 

However for strange reasons, Government is not willing to bite and offer solution to people of Nagpur. However, Pratap Hogade, well known energy expert, offered further insight saying each of the company is driven by its operational expenses, total profit and loss elements that determines final tariff. He sarcastically stated that MSEDCL is proud to be number 1 in power tariff in country and is unwilling to even offer relief to industry fearing same would push up industrialisation in State. A mere Rs 2/unit lowering of tariff at the most would cost Rs 5,000 to Rs 6,000 crore dent to MSEDCL revenue but same can boost industry capacity five times and State can recover same through GST that could be tune of Rs five lakh crore. Plus this would create employment opportunities but State leaders do not want to risk their political career for such drastic change Further, MSEDCL has highest transmission and distribution losses and that complicates the matter as this has direct bearing on final power tariff. The problem has increased from 2010-11 onwards and Hogade said despite numerous representation, the political establishment is not in mood to provide respite to people of Maharashtra.