Deloitte to pen report on uniform power tariff in Greater Mumbai

Ruling-opposition combine backs proposal eyeing 2017 Mumbai civic polls

The Maharashtra government has roped in Deloitte to prepare a report on introducing uniform power tariff in Greater Mumbai for consumers with monthly consumption of up to 500 units. The state government will soon issue a letter appointing Deloitte and instructing it to give an interim report by Thursday and final by July.

Tata Power, Reliance Infra, BrihanMumbai Electric Supply & Transport and MahaVitaran distribute power in the metropolis and the per-unit tariff for 0-500 units ranges between Rs 2.05 and Rs 11.63.

The ruling and opposition parties support the idea of uniform tariff with an eye on election to the BrihanMumbai Municipal Corporation in February 2017.

State energy minister Chandrashekhar Bawankule told Business Standard, “The tariff charged by various utilities in Greater Mumbai is different. It is the government’s attempt to introduce uniform power tariff in the city. Meetings with the distribution utilities were already held and they were asked to give their inputs on the implementation of uniform power tariff.’’ The government would decide upon getting Deloitte’s report and inputs from the utilities.

An official in the state energy department said Tata Power’s revised tariff with effect from June 1, 2015 for 0-100 units is Rs 2.05; Rs 4.21 for 101-300 units; and Rs 8.42 for 301-500 units. Tata Power has a consumer base of around 600,000.

The tariff for Reliance Infrastructure with a consumer base of three million is Rs 4.79 for 0-100 units; Rs 6.54 for 101-300 units; and Rs 8.28 for 301-500 units.

BEST with a consumer base of one million, charges Rs 4.12 for 0-100 units, Rs 8.68 for 101-300 units; and Rs 11.63 for 301-500 units.

State-run Maharashtra State Electricity Distribution Company (MahaVitaran), which distributes power in eastern suburbs, charges Rs 3.76 for 0-11 units; Rs 7.21 for 101-300 units; and Rs 9.95 for 301-500 units.

The demand for uniform power tariff in Greater Mumbai has been revived for the second time after the Congress-Nationalist Congress Party government initiated the move in 2010-12 following a PricewaterhouseCoopers (PwC) report.

However, the government failed to implement it citing the order delivered by the Maharashtra Electricity Regulatory Commission (MERC) in June 2008. The order said the uniform power tariff was not feasible across different licensees owing to inherent differences such as revenue requirement, consumer mix, consumption mix, and low tension-high tension ratio.

MERC in a letter to the state government on July 11, 2011 said, “The Commission is of the view that the government support in the form of subsidy under Section 65 of the Electricity Act, 2003 is the only method to implement uniform tariff in Mumbai.”

PwC in its report had said uniformity could be attained only through measures for better efficiency and government intervention. However, government interventions need to be restricted to interim support, as subsequently, efficiency and cost-competitiveness of the utilities need to take over. There has to be support from the state government either in conjunction with an inter-utility transfer or independent of it.