Mumbai sees power tariff hikes this summer

Power companies have been asking for hike tariff rates after drastic increase in fuel costs and revenue shortfall during the pandemic

The Maharashtra Electricity Regulatory Commission (MERC) has approved a tariff hike for all electricity companies in the city including the rest of the state from April 1. City consumers are currently being catered to by four utilities, and will pay between two to 12 per cent more.

The primary reasons cited by all the companies, when the demand for the tariff hike was initially made were–an increase in fuel cost and a shortfall in revenue due to unpaid bills, during the Coronavirus pandemic.

MERC issued the tariff revision orders separately for all four companies late Friday night, along with the instructions that the new rates would be applicable from this month itself.

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For the Brihanmumbai Electric Supply and Transport (BEST) undertaking the Commission has approved an average tariff increase of around 5.07 per cent in FY 2023-24 and 6.35 per cent in FY 2024-25. The hike, reasoned BEST, was because it had paid more for procuring power embedded generation (Tata Power) within Mumbai due to transmission constraints.

For Tata Power Company, an average tariff increase of around 11.9 per cent in FY 2023-24 and 12.2 per cent in FY 2024-25 has been approved due to increase in fuel cost due to variations on account of imported fuel costs.

The Commission has approved an average tariff increase of around 2.2 per cent in FY 2023-24 and 2.1 per cent in FY 2024-25 for Adani Electricity. The latter had cited increase of transmission charges for the hike.

Finally on to the largest supplier of power, Mahavitaran (MSEDCL), MERC, said that the increase in tariff for various categories was inevitable.

However, the overall average tariff hike approved by the Commission for FY 2023-24 was only 2.9 per cent and for FY 2024-25 it was 5.6 per cent, as against MSEDCL’s claim of 14 per cent and 11 per cent, respectively.

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