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Home News Power Sector News Rise in coal prices likely to push up power tariff: MERC

Rise in coal prices likely to push up power tariff: MERC

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MSEDCLIndicating that power tariffs arelikely to increase due to a rise in costs of fuels like coal, Maharashtra Electricity Regulatory Commission (MERC) chairman VP Raja said the "consumers should be mentally prepared for the hike". Raja hinted at the imminent hike on Wednesday while speaking at a suo motu hearing organised after consumer groups complained against the Maharashtra State Electricity Distribution Company Limited's (MahaVitaran) move to change the load-shedding protocol.

The MahaVitaran decision to increase hours of power cuts in areas with high distribution and commercial losses while granting exemptions where these losses were low has been met with criticism from consumer groups, who complained that the utility took the decision without consultation or concurrence with the MERC. They also pointed to a supreme court order and judgement of the Appellate Tribunal for Electricity (ATE) which had upheld the MERC's jurisdiction in determining the load-shedding protocol and stipulated the need for a consultative process for changes.

However, MahaVitaran's decision was not stayed or set aside by the regulator despite the demand of consumers groups. In a shot in the arm for the MahaVitaran, Raja said the regulator was in favour of reducing losses and increasing the revenue.

"The time has come when every consumer of electricity must understand that there is no free electricity," he added, while mooting toughest possible measures to reduce losses and improve recovery. He, however, pointed out that by no means should illegal methods be used for it.

Stating that prices of primary fuels, like coal, were going up and hence, Raja said people must be mentally prepared for a tariff rise. Power purchase expenditure formed a substantial portion of the costs of the distribution companies.

About the state government's assurance that Maharashtra would be load-shedding free by December 2012, Raja asked MahaVitaran to put forth a road map, including the financials, on how it planned to proceed in this regard in the next seven months.

Raja announced a committee, with a MERC representative as the convenor and consumer representatives and MahaVitaran officials as members, which would look into the change in the load-shedding protocol.

While the committee is expected to complete its work by June 5, the next hearing in this regard will be held on June 22.

Source - DNA


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