Power utility keen to cut residential users' tariff

The Times of India , Saturday, November 02, 2013
Correspondent : Somit Sen,
MUMBAI: The state power distributor-Maharashtra State Electricity Distribution Company Ltd (MSEDCL)-is keen on exempting residential users from paying renewable energy (RE) charges.

The utility, which supplies power to Thane, Navi Mumbai and parts of the eastern suburbs, wants to impose the levy on "polluting" industrial units. A petition with regard to the RE charges was heard by the Maharashtra Electricity Regulatory Commission, which in its order this week stated that "the petitioner may raise the issue during the tariff determination of MSEDCL". "Following the regulator's order, we will present a proposal for exempting RE charges and reducing tariff for residential consumers in the aggregate revenue requirement," a MSEDCL spokesperson told TOI. The aggregate revenue requirement for a multi-year tariff plan is likely to be submitted by December after which public hearings will commence.

Industry associations have strongly opposed the proposal. "It is unfair to create a separate category of polluting units. All industries receive a certificate from the pollution control board and industries are already make efforts to minimize effluence," said SL Patil of Thane Belapur Industries Association. and keep it within the permissible limits. Imposition of cost of RE power on industries shall increase their tariff. "It would be great injustice and many industries in Maharashtra will either close down because of unaffordable power or shift to other states,'' he pointed out.

Power expert Ashok Pendse also questioned the state power distributor's rationale.

"We are not buying renewable (non-conventional) energy because of pollution, but it is being promoted because in years to come, the conventional resources such as coal and gas are going to get depleted. It is irrational to impose RE charges on industries," he said. "The tariff for RE sources is very high. The average cost of purchasing renewable energy has increased Rs 3.81 per unit in 2009-10 to Rs 4.32 per unit in 2012-13. Due to the higher cost of RE power purchase, the average cost of MSEDCL also rose from Rs. 3.30 per unit to Rs. 4.25 per unit," a MSEDCL official said.

"This has direct impact on ARR and subsequently affects the overall tariff, specially the tariff of low end common consumers of MSEDCL,'' the official stated. "Since the burden of RE purchase is borne by the common consumers, we want to change the scenario and pass it on to the industries responsible for pollution and climate change,'' he added.

The industries associations are likely to raise objections when the ARR comes up for public hearing, sources said. "However, we are taking the step in the general interest of the low-end consumers, who are burdened with hefty electricity bills,'' a MSEDCL spokesperson added.

MERC has asked Tata Power company to treat all residential consumers, with an average consumption of upto 300 units in the last 12 months, as direct consumers from November 1. This means that consumers in the 11 clusters will be paying less tariff. Tata will have to procure necessary power for these consumers and also create infrastructure and provide customer care facilities in near future.

SOURCE : http://articles.timesofindia.indiatimes.com/2013-11-02/mumbai/43610914_1_tariff-msedcl-aggregate-revenue-requirement

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