Meeting regarding Power Tariff Hike in Maharashtra -
A Report




COSIA in association with Electricity Consumers and Industrial Associations Co ordination Committee, Maharashtra and Maharashtra Chamber of Commerce, Industry and Agriculture had convened a meeting of Industrial Associations from Konkan Region of Maharashtra State at TSSIA House, Thane – MH on 27th December, 2018 to discuss important issues relating to Electricity Tariff and allied matters like:

  1. MERC Order dated 12th September 2018 on Mid Term Review Petition of MSEDCL.

  2. Impact of Hike in Power Tariff on consumers which is around 15%.

  3. Issues related to power factor and other power hike related important issues.

Mr. Pratap Hogade (Electricity Consumers’ Rights Activist) and Dr Ashok Pendse (Power Sector Expert) explained the above issues and their wide ranging implications on Industrial Costs to the representatives of Industry Associations. After detailed discussions, it was decided to present a Memorandum to the Government of Maharashtra demanding the withdrawal of the Tariff Hike vide the MERC order dtd. 12th September, 2018 on the Mid Term Petition of MSEDCL and the following suggestions were also be made to the Maharashtra Government:

  1. The earlier electricity tariff declared by MERC vide its Order in November 2016 should be retained upto March 2020. As promised by the State Government, Electricity Tariff should not be further increased till it comes at par with adjoining states and for that all the necessary & stringent measures should be implemented.

  2. Previous Government had taken a decision of Rs 600 Crs per Month Subsidy to MSEDCL from January 2014 to keep the energy rates at earlier level. Now the requirement to keep Industrial Tariff at earlier level will be Rs 150 Crs per Month from September 2018 to March 2019 & Rs 200 Crs per Month from April 2019 to March 2020 i.e. in total Rs 3400 Crs for 19 months. Now, the State Government should sanction this subsidy for survival of the Industry in the State and also in the interest of the State and Government.

  3. Due to the inefficiency and higher production cost, MSEDCL is paying excess Rs.1.00 per unit to Mahagenco and Ratan India etc for power purchase. This has an impact of 0.50 Rs per Unit on the Tariff of all the consumers in the State. Increase in the efficiency of Mahagenco and increase in the PLF to 80% can avoid this excess burden.

  4. The actual distribution losses are 30% or more. The burden of additional distribution losses in consumer’s tariff is Rs. 1.00 per Unit. Burden on MSEDCL is Rs 10,000 Crores per annum. Actual real distribution losses should not be above the limit of 12%.

  5. The report of “Agricultural Consumption Fact Finding Committee” along with concerned “IIT Mumbai” report should be declared & approved to determine Electricity Consumption and Distribution losses. Electricity bills of agricultural pumps should be corrected and then after only, on the basis of the same new “Krushisanjivani” scheme should be declared. New subsidized electricity rates for agricultural pumps should be determined and implemented.

  6. The huge capital expenditure & higher O&M expenses of Mahagenco and Mahadiscom should be controlled and brought down to reasonable level, so as to further reduce the average Cost of Supply.

  7. MSEDCL has 24 x 7 availability of power. But there are power failures of average 2 hrs all over the State due to Local Interruptions such a Transformer failures, breakdowns, overhead wires breakdowns, poles collapsing, voltage problems etc. Therefore MSEDCL is losing yearly Revenue of Rs. 6000 crores unnecessarily. Consumers’ losses are four times or more. It causes revenue loss to State Government also. To avoid these losses, proper stringent measures should be taken immediately and directions should be given to MSEDCL.

Later, Dr Pendse and Mr. Hogade addressed a press conference detailing the issues faced by the Industrial Sector in Maharashtra due to high power tariffs and about the unrest and agitation throughout the State due to the same.