Pay less in power bills for next five years

MERC reduces commercial tariffs by 8-19 per cent to help sectors cope with economic crisis; reduction in residential rates too

With the economy gripped by an unprecedented crisis posed by the Covid-19 pandemic, the Maharashtra Electricity Regulatory Commission (MERC) has determined new lowered rates in all categories. Electricity consumers across the state will now pay 1.5 per cent to 19 per cent less in the next five years. This will be especially crucial for industrial and commercial consumers which are expected to take a major hit in the impending recession.

The MERC issued orders for four distribution companies (discoms) — Brihanmumbai Electricity and Transport undertaking (BEST), Adani Power and Tata Power Company and Maharashtra State Electricity Distribution Company Ltd (MSEDCL) — on Monday. All the companies had asked for increasing tariffs in most of the consumer categories earlier.

However, a massive cut in commercial and industrial consumers should be seen as a game-changer in the next three years because these segments were charged much higher than other investor-friendly states. The situation is expected to improve as the new tariff would come into effect from the billing cycles beginning April 1, 2020. The development is encouraging in the time of a crisis.

Mumbai's domestic consumers in the BEST area (island city) would pay 1.5 per cent less. The reduction in this category is not much as compared to Tata and Adani consumers because BEST had anyway been charging less for the residential category. It would now charge eight per cent less for the commercial segment and seven per cent less for the industrial category.

Big drop for others
Tata Power, which caters to island city and suburbs, and suburban distributor Adani Power have been given similar tariffs. They would charge 11 per cent less for residential and 19 per cent less for commercial and industrial categories, which is huge considering their consumer base mix.

MSEDCL which is Asia's biggest power distributor would charge five per cent less from domestic consumers, 11-12 per cent less from the commercial segment, 10-11 per cent less from the industrial category and charge one per cent less from agricultural pumps.

'Without govt subsidy'
MERC chairman Anand Kulkarni, who has been working on the mechanism despite being stranded in New Zealand, told mid-day over a phone call that the orders were unique in nature because the tariff is reduced by suggesting fiscal management in the discoms instead of offering any government subsidy or impetus. “There will be no change in the tariff for the next three to five years. MERC has suggested in-built fiscal management to the companies and we will guide the discoms from time-to-time to ensure that the tariff is not impacted,” said Kulkarni, adding that the factors that are beyond human control might impact tariff in the five-year period.

No bill recovery for 3 months
MERC also gave commercial and industrial consumers relief by telling companies to not recover bills for the next three months. Domestic consumers have not been given this relief. MERC chairman Anand Kulkarni said that the commercial and industrial consumers would definitely suffer huge losses during the crisis and hence were extended relief.

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