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Mahavitaran says viability at stake if tariffs not hiked

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Close on the heels of Maharashtra government announcing a 20 per cent cut in power tariffs across the state but Mumbai, state utility Mahavitaran has said it will push its applications seeking hike in charges, which are pending with the regulator, citing its worsening financials.

Mahavitaran warned that it will not be able to meet its expenses from next fiscal if MREC does not clear its pending 10 per cent tariff hike proposal.

“We need a tariff hike to meet our capital and operational expenses. If the tariff revision proposals are not cleared, it will adversely impact our operations,” a Mahavitran official said.

The utility, which is yet to hear from the MERC on its tariff proposals submitted seeking 10 per cent hike each in FY14 and FY15, today warned it may have to resubmit proposals. Mahavitaran has over 21 lakh consumers.

The Maharashtra Electricity Regulatory Commission (Merc) had allowed the utility a 20 per cent increase in tariff for six months, from September 1 last, with a view to recover Rs. 5,500 crore from consumers in monthly tranches so that it could pay the generation and transmission companies.

The official said that Monday’s cabinet decision has lowered the tariff to the rate which was prevalent prior to September last year.

Following the move, the government will have to pay a subsidy of Rs. 606 crore a month and another Rs. 100 crore will have to be contributed by Mahatransco and Mahagenco.

Currently, Mahavitaran’s average power purchase cost is Rs. 3.62 per unit against the supply cost of Rs. 6.21 per unit.

According to the Merc’s order, from March 1 this year, the tariffs will come to the levels of pre-September rate.

Therefore, in case the tariff petition is not cleared, the state utility will not require the subsidy as the purpose of providing the subsidy was to lower the burden on Mahavitaran to pay its dues, the official explained.

If MERC allows the 20 per cent reduction, the tariffs for residential consumers using up to 100 units and 300 units will come down to Rs. 3.36 per unit from the existing Rs. 4.16 per unit and to Rs. 6.05 from Rs. 7.42, respectively.

According to the government’s decision, the 20 per cent tariff cut relief would not be applicable to residential consumers using energy above 300 units.

For the high tension industrial consumers (express feeders) the tariff has been lowered to Rs. 7.01 per unit from Rs. 8.61 per unit and for high tension (non-express feeders) it will come down to Rs. 6.33 from Rs. 7.83 per unit.

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