Steep 20% hike in power tariff in Maharashtra to recover dues

Power distribution company Mahavitaran today said its consumers will have to face a steep 20% tariff hike from October but blamed the delay on the part of regulator MERC in allowing recovery of dues from Mahagenco and Mahatransco for the one-time spike.

The amount, estimated at Rs 5,343 crore, has to be recovered from consumers within six months beginning October 1, an official from the state utility (Mahavitaran) said.

According to the official, this tariff increase is towards the recoveries of 18 months of state generation (Mahagenco) and transmission (Mahatransco) companies which has to be collected from consumers.

"Consumers would not have had to face 20% tariff hike if MERC (Maharashtra Electricity Regulatory Commission) had allowed us to recover the dues to these companies earlier.

"But due to the delays on the part of the commission, consumers will have to face these stiff tariff shocks," Mahavitaran executive director Abhijit Deshpande told reporters here today.

He said that while the commission had allowed Mahagenco and Mahatransco to recover their capital cost and transmission charges, it has not considered the additional cost burden suffered by Mahavitaran due to increase in its capital cost.

"The cost pass-through to the consumers could have been handled effectively, had the Merc not delayed its order.

"Moreover, since the regulator has not yet considered our petition to pass on the additional cost, our carrying cost (interest on loans) has increased significantly," he said.

The increase in tariffs would be in the range of 80-90 paise depending on the category of consumers.

Mahavitaran currently has total liabilities to the tune of Rs 13,094 crore out of which Rs 4,395 crore is towards bank loans and interest.