MSEB plans largest-ever power tarrif hike

MUMBAI, MARCH 9: Power consumers in the lowest income bracket will be the hardest hit if the largest-ever power tariff hike planned by Mah...

MUMBAI, MARCH 9: Power consumers in the lowest income bracket will be the hardest hit if the largest-ever power tariff hike planned by Maharashtra State Electricity Board (MSEB) takes effect.

As per the new tariff proposals for 2000-2001 submitted by the Board before the Maharashtra State Regulatory Commission (MERC), over 32 lakh residential users consuming less than 50 units, comprising the lowest income bracket will face a tariff hike of 62 per cent. In a presentation given before the Commission on Thursday, the Board proposed an average tariff hike of around 20 per cent, more than doubling its proposal for the previous year. Other residential consumers in 51-100 units category will face a 29 per cent hike while the 101-200 units category awaits a 23 per cent hike.

The non-domestic or commercial sector will also bear the brunt of this exercise as the proposed tariff for the sector will zoom to Rs 5.77 per unit which will be the highest ever power tariff in the country in any category.

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These proposals will be reviewed by the Commission and a final decision is expected by April-end. A perusal of the data submitted by the Board on Thursday reveals that the revision seems imminent considering the costly capacity addition from Enron.

MSEB statistics indicate that during 2000-2001, Dabhol Power Company (DPC) will sell 4,200 million units to the Board which will cost around Rs 2,000 crore. Interestingly, defying the claims till date made by the Board, the average rate at which power will be bought from Dabhol will soar to Rs 4.75 per unit.

Another major reason which forces the Board to hike rates is a major dip in high tension consumers which form the main source of revenue for any electricity board. But for MSEB a liberal captive power policy adopted by the previous Sena Government has aggravated the scenario, which sanctioned over 1,600 MW of captive power. Companies based in Maharashtra have already set up over 600 MW of captive power with another 1,000 MW in the pipeline.

As per the data submitted for tariff revision, MSEB will be facing a huge deficit of Rs 2,018 crore in 2000-2001 which necessitates a rate hike of this magnitude. Energy experts feel that unless the State Government sanctions direct budgetary support to rescue the board, these proposals have to be implemented and that the regulatory commission might have no other option but to pass these proposals.

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Since the MERC has to review these proposals as per a recent High Court verdict, one has to wait till April-end to see whether these proposals will be implemented in toto.

MSEB will be presenting a detailed presentation of the proposal before the Commission on Friday.

As per the present plan, the Board is expected to send the revised tariff proposals to all the consumers who had filed petitions before the Commission challenging the earlier revision proposals. A public hearing on the matter has been scheduled in Mumbai for April 10 and 11.

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