The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has proposed a near-doubling of its power tariff across the state (excluding Mumbai) and projected a huge deficit of Rs9,578 crore and pending dues of Rs10,000 crore.

MSEDCL has proposed a 100 per cent hike in fixed charges and 10 to 50 per cent hike in variable charges in its power tariff for residential consumers.

Over 10 million consumers in the Mumbai suburbs of Mulund, Bhandup, Kanjurmarg, Thane, Kalyan-Dombivli, Navi Mumbai, Ulhasnagar, Bhiwandi and Vasai-Virar are likely to see their electricity bills double once the Maharashtra Electricity Regulatory Commission (MERC) clears the proposal in its present form.

MSEDCL has proposed a tariff of Rs6.92 per unit against the existing Rs4.64 per unit for high tension (HT I) consumers in the continuous process industries and Rs5.76 per unit (Rs4.28 per unit) for HT non-continuous process non-express feeder industries.

For seasonal HT consumer industries, MSEDCIL has proposed a tariff of Rs7.15 per unit against the current Rs5.35 and Rs9.81 (Rs7.39) for HT II industries.
 
MSEDCL has spared farmers, consumers below poverty line (single bulb category) and water supply schemes from the proposed tariff hike.

MERC will hold public hearing on the proposal at various centres beginning 17 June. The schedule is: Amravati - 17 June; Nagpur - 18 June; Aurangabad - 22 June; Nashik - 25 June; Pune (Council hall) - 29 June;  and Navi Mumbai - 1 July. Hearings will start at 11 am.

The proposal comes after a negative growth of -0.25 in energy sales to high tension (category I) industries in 2008-09 under the weight of the economic slowdown.

Energy sales to high tension non-continuous process industries is down 10 per cent while sales to seasonal high tension industries has fallen 34 per cent and to high tension agricultural consumers by 1.06 per cent.

MSEDCL has estimated a net annual revenue requirement of Rs31,029 crore for 2009-10, of which, it said, power purchase alone would cost Rs21,342 crore.  Almost 82 per cent of revenue is spent on power purchase, MSEDIL said.

The power utility has projected a revenue gap of Rs9,578 for 09-10 even as it claimed an incentive of Rs284 crore for 2007-08 for achieving reduction in transmission and distribution losses.

MSEDCL said while the cost of power generation has been rising, its spending on improving power system and consumer service have also gone up.

"The thermal power stations do not get enough coal from sources within the country, so the power utility has to import coal, which comes at higher prices," MSEDCL said in a note listing the reasons for proposing a tariff hike.

"For 2009-10, the company proposes to spend Rs2,500 crore on basic infrastructure development, Rs1,836 crore on gaothan feeder separation for better load management and Rs162 crore on accelerated power development programme," the note said, adding that consumers should pay more for better service.

For domestic consumers, the proposed tariff (with existing rate in brackets) would be:  0-100 units - Rs2.58 per unit (Rs2.34); 101 to 300 units - Rs5.40 per unit (Rs4.23); 301 to 500 units - Rs7.70 per unit (Rs5.66); Above 500 units - Rs9.21 per unit (Rs6.57).

The fixed charge would be Rs60 against the existing rate of Rs30 for the first three slabs, Rs200 (Rs100) for the fourth slab.

Advertising hoardings: Rs 800 fixed charge (Rs400) and Rs19.32 per unit (Rs14.53)

The state electricity regulator had last year allowed MSEDCL to raise electricity tariffs by 4.2 per cent against a proposal for 19.4 per cent hike, following a 5.6 per cent (25.7 per cent proposed) hike in 2007-08 and a 16.9 per cent (28.8 per cent proposed) hike in 2006-07.