NAGPUR: It’s a double whammy for all power consumers in the state, barring those in Mumbai island city. Power tariff is set to go up more than 35%, 20% of which will be with immediate effect.

The bill consumers will receive in January will be up by 20% as the new BJP-Sena government has withdrawn the subsidy of around Rs 700 crore per month on power tariff announced by the Congress-NCP government earlier in the year. It will not affect those using agriculture pumps.

State power subsidy was to end in March

The second shocker will come in a few months as the Maharashtra Electricity Regulatory Commission (MERC) is set to increase the tariff by over 15%.

MSEDCL had filed a petition seeking recovery of Rs 9,312 crore from April 1, 2014, from consumers. MERC issued an interim order allowing the distributor to recover Rs 5,022 crore in 12 months. With parliamentary elections round the corner, the state Congress-NCP government provided a subsidy of Rs 8472 crores in 12 monthly instalments of Rs 706 crore. This was to last till February 2015.

Now that the government has withdrawn the subsidy, the hike in power bills will reflect from December 1, 2014 instead of March 1, 2015.

Justifying the decision, CM Devendra Fadnavis said that subsidy was not a solution to reduce tariff. “We will improve the working of state-run power companies to do it. This will be reflected in the next tariff petition. We will give relief to industries in the next petition,” he said.

The CM’s assurance notwithstanding, MERC will increase the tariff again when it allows MSEDCL to recover Rs 4,290 crore, the second instalment of Rs 9,312 crore. However, this would be done only after holding public hearings.

This apart, government had asked Mahagenco and Mahatransco to contribute Rs 50 crore each per month towards the subsidy. This has been challenged in MERC as the government cannot force state-run companies to provide subsidy with compensation. The two companies will recover the Rs 1,200 crore loss from consumers.

Earlier, the government was thinking only about increasing the rate for industries. However, due to alarming position of state finances, the government bit the bullet and withdrew subsidy for residential and commercial consumers.

After MSEDCL recovers its deficit, it will file the tariff petition for 2015-16. This will further increase the tariff. Mahagenco has already filed its petition and Mahatransco too is expected do it soon. The revenue approved by the Commission will be recovered from MSEDCL and ultimately the consumers.

