Power tariff cut by 15-20% in Maharashtra except in Mumbai

The Congress party-led government in Maharashtra has announced a 15 to 20 per cent reduction in electricity tariffs across the state, except Mumbai, television channels reported today.

While the decision is not applicable to Mumbai consumers where the rates are the highest, the tariff reduction will benefit domestic consumers, industries and powerlooms served by the state-run Maharashtra State Electricity Distribution Company (MahaVitaran).

The decision, which is based on the recommendations of a panel of ministers that looked into power tariffs in the state following a decision by the Aam Aadmi Party (AAP) government in Delhi to reduce power tariff for consumers in the lowest usage bracket by 50 per cent.

The Maharashtra government's decision to cut power tariff ahead of the coming Lok Sabha elections will impose a Rs7,099-crore annual burden on the state government to compensate MahaVitaran.

However, MahaVitaran too will have to share about Rs200 to Rs500 crore of the total burden of Rs7,099 crore.

Today's decision will not apply to power users in Mumbai who get power supply from Tata Power, Reliance Infrastructure and BrihanMumbai Electric Supply and Transport Undertalking.

According to MahaVitaran, a 20-per cent reduction in the average billing rate (ABR) would reduce industrial tariff by 87 paise to Rs7.45 a unit from the present Rs8.32 a unit.

The government already provides an annual subsidy of Rs10,500 crore to agricultural consumers and Rs1,100 crore to power looms.

MahaVitaran cross-subsidises this with industrial and commercial consumers contributing Rs6,500 crore of this while the state government pays the remaining Rs5,100 crore.

Despite continued increases in power tariffs, India continues to suffer peak hour power shortages of around 4 per cent as higher demand from cities and industries outpaces growth in power generation capacity.