You'll have to pay more for electricity from Apr 1

MUMBAI: Over 1.5 crore MahaVitaran consumers across Maharashtra, including those from the Mumbai suburbs of Mulund, Bhandup and Kanjurmarg, will have to pay more for electricity from next billing cycle after the state power regulator Maharashtra Electricity Regulatory Commission (MERC) allowed the state power utility to recover Rs 763 crore from its consumers.

MahaVitran consumers will have to pay 10-30 paise more for every unit consumed beginning April 1. The current hike will push power tariff up by around 10%. The average cost of electricity supplied by MahaVitaran, the distribution arm of the state utility, is around Rs 3.50 per unit. This, incidentally, is a fourth tariff hike in the last one year.

The tariff hike was necessitated after coal prices were increased recently. The Maha-Genco, the generating arm of the state utility, has been seeking the regulator’s permission for the recovery of Rs 1,500 crore it had incurred for power generation. MERC, however, gave its nod for the retrieval of Rs 763 crore.

Earlier in October 2009, MERC had allowed a tariff hike of 25-30 paise per unit. The regulator permitted another hike, of Rs 0.35/unit, in December 2009 in order to meet higher expenses for the expansion of the ailing Ratnagiri Gas and Power Project at Dabhol. In January, the regulator gave nod for another upward tariff revision, by Rs 1.20/unit, which came in the form of clean energy cess on coal. This added another Rs 2,300 crore to the power utility’s annual kitty.

But consumers will have to face another round of price hikes soon.

Union finance minister Pranab Mukherjee, while presenting the Budget last week, had proposed a clean energy cess of Rs 50 on every tonne of coal purchased by power generation companies. Energy ministry officials said that this will be passed on to end-users.

The MahaGenco purchases around 4 crore tonne of coal every year, of which nearly 2.5 crore tonne is imported. “This sets the tone for one more tariff hike,” the energy ministry official said. So the next fiscal is likely to see one more hike, of around 10% per unit, to enable power utility to meet additional expenses.