MSEDCL proposes nearly 40% hike in power tariff from April

Mumbai: The state-owned Maharashtra State Electricity Distribution Company Limited (MSEDCL) has proposed a 30%-40% tariff hike for residential and commercial consumers.

MSEDCL was the last power distribution company after Adani Electricity Mumbai Limited, Tata Power Company, and Brihanmumbai Electric Supply and Transport Undertaking to have filed its mid-term tariff revision petition before Maharashtra Electricity Regulatory Commission (MERC). The commission has invited objections and suggestions through a public notice.

It means all electricity consumers in the city are likely to pay more from the next financial year.

Currently, the fixed cost for residential consumers of MSEDCL is ₹105 per month and it is proposed to be hiked by ₹13. It has also suggested to increase the wheeling charge for residential consumers from ₹1.25 per unit to ₹1.43 per unit.

Pratap Hogade, president of state electricity consumers’ organisation, said the main reason behind the tariff hike is the increase in cost of thermal power. “MSEDCL has proposed an average ₹2.55 per unit hike which includes a rise in energy charge, wheeling charge, and fixed cost. Put together, it comes to a 37% tariff hike through which the state utility plans to collect ₹67,644 crore in the next two financial years.”

“However, MERC should not allow more than a 10% hike,” he added.

Though all distribution companies are increasing the use of renewable energy like solar and wind, thermal power still plays a major role. The firms have shown in their proposals how the cost of power purchase had gone up more than the estimated price in the last two years due to the hike in the thermal power cost.

In case of MSEDCL, the cost of power purchase was estimated at ₹60,568 crore for 2021-22 but the actual expense was ₹69,478 crore. For 2022-23, the power purchase cost was valued at ₹61,897 crore but the actual expense has gone up to ₹73,529 crore.