Shock for consumers, electricity bills to soar 25% in this state

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL), or MahaDisCom, consumers could end up paying up to 25% more than what they are currently shelling out as the state-run company wants to recover gap in revenue of Rs 34,646 crore for fiscals 2015- 2020.

Shock for consumers, electricity bills to soar 25% in this state
The Maharashtra Electricity Regulatory Commission (MERC), the state power regulator, is holding public hearings at various cities of Maharashtra over the issue. Representative image, source: PTI
By Ateeq Shaikh
Updated: Mon, Aug 13, 2018
10:06 am
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Power sector may cause further stress for banks Power sector may cause further stress for banks
Viability of renewable energy projects worth Rs 48,000 crore hang in balance as banks turn cautious on lending Viability of renewable energy projects worth Rs 48,000 crore hang in balance as banks turn cautious on lending
States take over Rs 2 lakh crore of DISCOMs debt via UDAY scheme States take over Rs 2 lakh crore of DISCOMs debt via UDAY scheme
Power Minister Piyush Goyal launches web portal, mobile app for UDAY scheme Power Minister Piyush Goyal launches web portal, mobile app for UDAY scheme
Delhi Govt summons Anil Ambani; says power cuts must stop Delhi Govt summons Anil Ambani; says power cuts must stop

Power shock awaits about 2.5 crore electricity consumers in Maharashtra. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL), or MahaDisCom, consumers could end up paying up to 25% more than what they are currently shelling out as the state-run company wants to recover gap in revenue of Rs 34,646 crore for fiscals 2015- 2020.

The Maharashtra Electricity Regulatory Commission (MERC), the state power regulator, is holding public hearings at various cities of Maharashtra over the issue.

For fiscals 2015-16 and 2016-17, the reasons for final truing up sought by MSEDCL include lower revenue from sale of power due to change in consumer mix, variation in power purchase expenses, increase in operation and maintenance expenses, lower transmission charges than approved by MERC, among others. “MSEDCL submits that these deviations are beyond the reasonable control...,” reads its summary, “There is an urgent need for ensuring recovery of full cost of service from consumers to sustain the operations of the company.”

The recovery is likely to be made through hike in fixed and energy charges for various categories in order to bridge the revenue gap.

As part to provisional True Up for the financial year 2017-18 and mid-term review for FY2018-19 and 2019-2020, MSEDCL has cited lower income from additional surcharge and a change in capital expenditure related expenses. “MSEDCL has used historical trend method and estimated energy consumption for various consumer categories using three years CAGR.

Wherever it is observed that the trend is unreasonable / unsustainable, the growth factors have been corrected to arrive at more realistic projections. “It is seen that in FY17-18, sales in High Tension Industry category has increased. This is mainly on account of sourcing more power by some of the Open Access consumers from MSEDCL as can be seen from the reduction in Open Access quantum in FY17-18 from FY16-17,” said the company’s petition.

Watch this Zee Business video

“With explanations given by MSEDCL, electricity bills of the entire state will increase by 20-25%. Even users from some areas within Mumbai may have to shell out additional money,” said Ashok Pendse, a power expert.