Chorus for power rate cut rises in Mumbai

Congress has emphasised the need to provide open access, permissible under the Electricity Act, 2003, to give choice in power supply in Mumbai

The ruling Congress in Maharashtra and various consumer organisations have made a strong case to bring down power tariff in Mumbai by reduction in various taxes, sharing of charges by the government and open access.

Congress’ Member of Parliament (MP) from Mumbai North-West constituency Gurudas Kamat has emphasised the need to provide open access, permissible under the Electricity Act, 2003, to give choice in power supply in Mumbai. Open access allows users of power to choose the provider.

In separate letters addressed to Chief Minister Prithviraj Chavan and Maharashtra Electricity Regulatory Commission (MERC) member Chandra Iyengar, Kamat said all consumers whose electricity consumption is up to 300 units be allowed to switch to Tata Power. “Tata Power may be directed to provide the services to the people of Mumbai wanting a change. Tata Power rates are nearly Rs 2 per unit less than other company in the market for consumers with monthly consumption of 300 units,” he noted.

According to Kamat, open access and shift of consumers to Tata Power will benefit two million households in Mumbai. “Besides, the consumers will also be benefitted due to the subsidies and withdrawal of taxes by the government and the power regulator,” he opined.

As far as low-end consumers of Tata Power distribution is concerned, it was revised upward last year by MERC but was much lower (Rs 2.13 a unit) compared with Reliance Infrastructure distribution’s low-end consumers (Rs 3.93 a unit for 0-100 units). For 101-300 units, the charges are Rs 3.62 a unit and Rs 6.84 a unit, respectively. Kamat’s entry into the ongoing debate on reduction in power tariff for Mumbai consumers come at a time when his party colleague and MP Sanjay Nirupam and Shiv Sena have already launched agitation in this regard. Chavan has also announced the government will soon take a decision to reduce power tariff for Mumbai consumers.

Ashwini Chitnis, senior research associate of Pune-based Prayas Energy Group, told Business Standard: “There is a need to address the difference in consumer mix of the two parallel licencees, which cannot be achieved by simply imposing surcharges. We had pointed out this need to balance the consumer mix right at the time of beginning of the changeover process, so as to avoid dangers of cherry-picking as well as to ensure that select few categories of consumers are not over-burdened because of cross-subsidy surcharge. The commission should still explore this alternative rather than waiting for appropriate category of consumers to migrate. In any case, the commission should consider this issue at a broader level through a consultative process involving all concerned stakeholders.”

Further, Ashok Pendse, consumer representative at the MERC, cited that there is no provision to provide open access under the Electricity Act, 2003 in the area where power is supplied by BrihanMumbai Electric Supply & Transport (BEST) largely in south Mumbai. At present, the open access is allowed for 1-MW and above consumers, but it will not help the common consumers using much lesser power. There is a case pending before the Supreme Court regarding creation of its own network in BEST area. If that gets decided, then such a relief can come to a section of consumers.

However, Pendse said power consumers especially of BEST (which are about 1 million) can get relief in tariff if BEST looks for cheaper sources of energy outside Mumbai instead of relying on Tata Power. This apart, the government can share regulatory assets of power distributors in the city.

Pendse informed that at present Tata Power, Reliance Infrastructure and BEST are paying a standby charge of Rs 500 annually to the MahaViataran. ''The government can waive it for two to three years as it will provide partial relief in power tariff to low end consumers,'' he added.