MERC cuts Mumbai power rates for first time

For a change, electricity consumers in Mumbai have no reason to complain, as the Mahararashtra Electricty Regulatory Commission has for the first time reduced the average tariffs across all categories.

Average tariffs for BEST consumers in the island city are down around 15 per cent, instead of the 6.21 per cent increase proposed by BEST. The revised tariffs will be applicable from 1 September.

The situation is just a little less rosy in the suburbs - for Tata Power Co's distribution business, the average tariff is up 15 per cent, but in the residential category, it is down in key segments: consumers using up to 100 units will pay 19.23 per cent less, and those using 100 to 300 units 7.41 per cent less. The new tariff rates for BEST and TPC consumers proposed by MERC will be effective from the September billing.

"The remarkable drop in BEST's tariff is because the company imported long-term cheaper and efficient power of about 800 MW for its consumers. BEST has also brought down transmission and distribution losses remarkably. This has ultimately impacted the tariff," said MERC secretary K N Khawarey.

By announcing these revised rates, MERC has in effect ended the war between Reliance Infrastructure and TPC, as both power suppliers will now be competing on a near-equal footing, with only a marginal difference in tariff rates, especially in the higher slabs. "This increase will restrict high-end R-Infra power consumers from shifting to TPC," said an industry expert.

Until now, both commercial and residential customers who consumed more units of power found it economical to shift to TPC, whose rates in higher slabs were less than those of R-Infra's.