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Power Tariff: Government will intervene after MERC order

The statement came in response to a query raised in the legislative council by MLC Narendra Patil (NCP) on tariff hike proposal of BEST before MERC.

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Committed to not put extra burden on consumers, state energy minister Chandrashekhar Bawankule on Wednesday said that the Maharashtra government will intervene once Maharashtra Electricity Regulatory Commission (MERC) passes its order on tariff proposals of power distribution companies.

Bawankula said the government is against levying additional charge in the form of transport deficit and loss recovery (TDLR) on power consumers in the island city. The proposal is still pending with the Maharashtra Electricity Regulatory Commission (MERC) and the government will intervene if the authority allows any any additional charges.

The statement came in response to a query raised in the legislative council by MLC Narendra Patil (NCP) on tariff hike proposal of BEST before MERC. "There are a few options before the government as to how to cover the Rs1,689 crore TDLR," said Bawankule, adding that TDLR losses are rising every year.

The options suggested include introducing transportation charges in the electricity bills or to impose electricity duty charges on Tata Power, Reliance and Mahavitaran. Another suggestion is to introduce a new transport tax as part of Property Tax by Brihanmumbai Municipal Corporation (BMC).

"Power distribution companies do not ask for government approval before submitting their tariff proposal to MERC. So far the MERC has not given its order and till then the old rates will apply," he said. Bawankule added that after the MERC gives the order then the government shall intervene.

He also said that the government along with BEST, BMC and Mahavitaran will hold a meeting to discuss proposal as to how the consumers are not burdened with increased tariff rates.

As per recent economic survey findings not all is shining in the power sector. The distribution and aggregate technical and commercial losses which signify the proportion of power theft and the general payment culture among consumers has shown a gradual rise for most utilities including the state run MahaVitaran.

As per the survey figures, the distribution losses for MAHADISCOM has increased from 14.17 % in 2014-15 to 15.77 in 2015-16. The figures are not very positive for private player as well. For Tata powers the loses have increased from 0.58% to 1.13%. However, Reliance Infrastructure and BEST have been able to contain these loses and have instead shown marginal improvement. As per experts, 1 % reduction in loss can bring additional revenue of Rs250 crore to the utility.

The story is no different for distribution and aggregate technical and commercial (AT&C) losses of MAHADISCOM which have increased from 14 % to 14.17 % and from 18.71% to 21.83%, respectively. Transmission losses have also increased from 3.89% to 3.95% for MAHATRANSCO and 3.89 to 4.01 for Tata powers.

The statistics for recovery against theft and the reported number of cases substantiate the increase in loses. The survey claims that under the anti-theft drive 61219 cases were detected during 2014-15 and an amount of Rs57.08 crores was recovered. During 2015-16 upto December, 28, 344 cases were detected and an amount of Rs 8.73 crores was recovered.

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