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Home News Power Sector News MahaVitaran worried as MERC sits on 10% tariff hike proposal

MahaVitaran worried as MERC sits on 10% tariff hike proposal

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MahavitaranThe state-run Maharashtra State Electricity Distribution Company (MahaVitaran), with a consumer base of 21.4 million and annual turn over of Rs 48,000 crore, today indicated that its operations will be adversely impacted after April 1 this year if the Maharashtra Electricity Regulatory Commission (MERC) does not clear its tariff revision proposals for 2013-14 and 2014-15.

MahaVitaran expects at least 10% each tariff hike for these two financial years to stay afloat.

Besides, MahaVitaran's investments will also be impacted if the tariff, which have been cut 20% across, remains in place after April 1. State government has approved 20% reduction in tariff which was in place for September 2013-March 2014 period.

The government's move has led to lowering of MahaVitaran's tariff to a level which was prevalent before September last year when MERC increased tariff allowing MahaVitaran to recover Rs 5,500 crore from the consumers.

The government will provide a subsidy of Rs 606 crore each for next two months and Rs 100 crore by MahaGenco and MahaTransco to MahaVitaran to compensate its revenue due to 20% tariff cut. However, MahaVitaran has clarified that it won't need the subsidy if the tariff is not revised and remains at the present level after 20% cut.

For the high tension industrial consumers (express feeders, the tariff has been lowered to Rs 7.01 per unit from Rs 8.61 per unit and for high tension (non express feeders) it fell to Rs 6.33 from Rs 7.83 per unit. For residential (0-100 units) the tariff was decreased to Rs 3.36 from Rs 4.16 per unit and for (101-300 units) from Rs 7.42 to Rs 6.05 per unit.

MahaVitaran official told Business Standard that it will soon approach the MERC with a fresh appeal to take up its tariff revision proposals for 2013-14 and 2014-14. This apart, MahaViataran will also inform MERC the government's approval for 20% tariff cut. The official said MahaVitaran will continue to oppose MERC's multi year tariff proposal instead it will press for annual tariff revision.

The official said tariff revision is quite necessary especially when its average power purchase cost is Rs 3.62 per unit against the cost of supply of Rs 6.21 per unit. Of the Rs 9,506 crore MahaVitaran collects annually it spends the same amount to subsidize domestic (Rs 1,008 crore), agriculture (Rs 6,935 crore) and others (Rs 1,563 crore).

''This is quite distorting as despite subsidizing agriculture consumers MahaVitaran's agricultural sales have shown minus 3% growth during 2011-12 and 2012-13. The agricultural sales have dipped to 20,891 million units from 21,643 million units. On other hand, sales to residential, commercial and industrial have surged during the same period. Therefore, the decision has been taken to meter the power supply agriculture consumers,'' the official informed.

Source- Business standard


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