The Maharashtra government is considering a proposal to split the state’s electricity distribution company into three or four smaller companies to tackle the mounting losses that are impacting any move to lower tariffs, and to also evenly distribute the large consumer base.
States such as Gujarat, Rajasthan, Karnataka and the National Capital Territory of Delhi have implemented this model and have multiple power distribution companies that have a defined region of operation in that state.
By dividing the Maharashtra Electricity Distribution Company Limited (MSEDCL) into three or four parts according to geographical zones, the state government is primarily looking to reducing power tariff and improving customer satisfaction.
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“There is a thought that if the MSEDCL operates through smaller units, there will be more efficiency in raising bills, recovery, administration, accountability and there will also be improved accessibility to consumers. This will have financial benefits, and when cash flows improve it will surely have some effect on tariff,” said Vishwas Pathak, advisor to State Energy Minister Chandrashekhar Bawankule.
Pathak is visiting states that have implemented this model along with MSEDCL Managing Director O P Gupta to study the feasibility, implementation pattern and gauge the success of the model in the states where it is currently in operation.
The two-member team visited Rajasthan last week and are scheduled to visit Gujarat and Karnataka soon.
State-owned MSEDCL caters to a customer base of around 2.3 crore. The company is struggling with receivables of in the range of Rs 18,000 to Rs 20,000 crore, including the dues for the current bill cycle and arrears, when on an average, the monthly receivables are in the range of Rs 4,500 crore. The company has a distribution loss of around 14 per cent.
“After visits to other states to study their experience, we will consult all stakeholders in Maharashtra — the MSEDCL directors, consultants, consumer groups and public representatives — before arriving at any decision,” Pathak said.
“Even if the state decides to divide MSEDCL into smaller companies on the basis of geographical regions, these may not necessarily have different electricity tariffs,” Pathak added, as in other states, their respective electricity tariff regulators have maintained uniformity in tariff for all the distribution companies operating in those states.