Sharp hike in power tariff for Nagpur's Mihan units

NAGPUR: Inability of Maharashtra Airport Development Company (MADC) to finalize long term power purchase agreement (PPA) at affordable rates is costing units in Mihan dear as the tariff for them has gone up sharply. The company is now trying to reduce tariff by reducing establishment expenses and going in for power purchase from exchanges.
A MADC official told TOI the average power tariff rate of Mihan had increased by Rs 1.04 per unit to Rs 5.42 per unit.“The power which was available below Rs 4 a unit is now available for Rs 4.50 to Rs 4.90 per unit. None of the bidders offered power at less than this range. We are thinking of outsourcing our work to the extent possible to reduce expenses. We will also buy power from exchanges where the rates at night are less. In case of PPAs, the rate is same throughout the day,” he said.
The official further said the hike was a temporary one. “In June, as soon as rains start the demand for power will go down sharply. At that time power producers will be forced to reduce their rates,” he explained.
According to the official, the industries that work round the clock would benefit the most if power was purchased from exchanges. “The night rate at exchanges is below Rs 3 per unit while the day rates are around Rs 4 per unit. The maximum rate is in the evening hours. In any case, we plan to go in for long term PPA from June or July,” he further said.
Commenting on tariff hike, an industrialist who did not wish to be named, said keeping rates affordable was extremely important for attracting industries to Mihan. “The promised rate was Rs 2.97 per unit but MADC could manage only Rs 4.38 per unit. The industrialists had reconciled to this but increase on long term basis will dent business sentiment,” he said.
The prospects for Mihan brightened after two city leaders Devendra Fadnavis and Nitin Gadkari rose to power in BJP led governments in state and centre. The issue of power tariff was resolved by chief minister Fadnavis soon after he took charge.
In a nutshell:
Power tariff of Mihan increased from Rs 4.38 per unit to Rs 5.42 per unit.
This is lower than MSEDCL’s industrial tariff but higher than what was assured.
Tariff up as MADC unable to buy power cheap.
MSEDCL will look at purchasing power from exchanges to keep cost low.