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Home News Power Sector News Maharashtra ends zero cross-subsidy surcharge regime

Maharashtra ends zero cross-subsidy surcharge regime

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MERCMaharashtra's power sector will undergo a major shift, as the state power regulator has ordered an end of the zero cross-subsidy surcharge (CCS) regime introduced in 2006 for open-access transactions. The Maharashtra Electricity Regulatory Commission (MERC) said on 09-09-2011 that it had levied CCS ranging from Rs 0.21 per unit to Rs 3.97 per unit for high-tension (HT) consumers payable to MahaVitaran, Rs 0.26 per unit to Rs 2.79 per unit payable to RInfra-D and Rs 2.58 per unit to Rs 2.81 per unit for TPC-D.

The CSS, the Commission said in an order, has been computed based on the average billing rates, power purchase cost, wheeling charges and system loss approved in the tariff orders of the respective licensees for the year 2010-11. The CSS for open-access transactions for various consumer category based on their voltage levels arrived would be applicable prospectively from on Friday onwards, it said in repose to a review petition filed by MahaVitaran, the Maharashtra State Electricity Distribution Company.

According to the regulator, it is "most likely" that HT industrial consumers in the MahaVitaran's area may opt for open access, for which the applicable CSS would be in the range of 21 paise and 92 paise a unit. Even after taking into account the applicable CSS, open access would still be beneficial to these consumers.

For, it is "in consonance with" the objectives of the Electricity Act 2003 for the promotion of open access and the development of market. This would also hold true with respect to the consumers of RInfra-D and TPC-D.

The analysis was carried out based on the assumption that an open access consumer can source power at Rs 3.50 per unit and avail a landed price based on the applicable wheeling charges. For example, "HT consumers (33kV) like Industrial / Commercial Consumers connected on Express /Non Express feeders will have a price advantage of about Rs 1.47 per unit if they opt for open access," MERC observed.

In case of Mumbai, MERC said the CSS applicable for changeover consumers, such as commercial consumers (below 66 kV & above 66 kV), would have applicable CSS in the range of 26 paise per unit to 83 paise per unit respectively. "MERC has also analysed the impact of CSS on the consumers opting for change-over from RInfra-D to TPC-D (for Group II Consumers). The result of the analysis shows that even after the levy of CSS on change-over consumers, such as, the HT commercial category consumers, they would still benefit. The savings that may accrue to these consumers would be 29.19 per cent for HT commercial category consumers," the regulator noted.

The MahaVitaran had argued that zero CSS would mean that the subsidised category of consumers would have to share the burden of loss of cross-subsidy whenever a consumer - otherwise providing cross subsidy through tariff - shifts away from it and opts for open access, which would not be in the interest of the larger section of the consumers.

MahaVitaran managing director Ajoy Mehta said the firm stood for poor and small consumers. "Today's order reiterates our stand," he told Business Standard.

An MERC official said it has decided to re-determine the CSS due to a change in the current power scenario vis-a-vis in 2006.

Source - Business standard


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