In a noteworthy development, Tata Power, the prominent electricity distribution company in Mumbai, has presented a substantial proposal for increased power rates, particularly impacting lower-end consumers in the city.
Proposed Tariff Changes: Tata Power’s proposal includes a substantial increase in the rate per unit, affecting consumers in different consumption slabs. For those using up to 100 units per month, the rate could rise from Rs 3.74 to Rs 7.37 per unit. Consumers falling in the 101 to 300 units category might experience an increase from Rs 5.89 to Rs 9.31 per unit.
Background and Rationale: The Maharashtra Electricity Regulatory Commission (MERC) had previously put a stay on a tariff structure implemented in July 2022, reverting to the 2020 structure. The proposed increase, when compared to the current rate of Rs 6.53 per unit, appears to be relatively lower due to the stay.
The existing tariff structure had led to a significant difference between the lowest and highest consumption slabs, resulting in high-end consumers subsidizing lower-end ones. The proposed rationalization aims to address this imbalance and establish a more equitable tariff structure.
Impact on Consumers: Tata Power serves around 7.5 lakh customers in Mumbai, with a substantial portion being residential consumers using less than 300 units per month. The proposed tariff revisions are anticipated to significantly impact these residential consumers, potentially resulting in increased electricity bills.
Stakeholder Feedback and MERC’s Role: Tata Power has proposed the tariff rationalization to come into effect from April 1, 2023. Stakeholders, including consumers and advocacy groups, have a 15-day window to provide feedback to the Maharashtra Electricity Regulatory Commission (MERC). MERC may schedule a hearing based on the received feedback to further deliberate on the proposed tariff revisions.
