January 2, 2014
MUMBAI: If Mumbai is to replicate the Delhi model of a 50% power tariff cut for the majority of residential consumers, it would require an annual subsidy of at least Rs 1,600 crore, experts say.
January 2, 2014
MUMBAI: If Mumbai is to replicate the Delhi model of a 50% power tariff cut for the majority of residential consumers, it would require an annual subsidy of at least Rs 1,600 crore, experts say.
Of the city's 41 lakh power consumers, 27 lakh are residential subscribers with under 400 units of use-the category for which rates have been halved in Delhi.
Though power experts and distribution companies are sceptical about tariffs being slashed in Mumbai in the near future, Congress MP Sanjay Nirupam has demanded subsidized power, specially for slum dwellers. "If Delhi can announce a cut in power tariff for the general public, why can't Mumbai follow suit?" he asked. Seeking a 50% price cut for residential consumers in the island city and the suburbs, he wrote to chief minister Prithviraj Chavan on Wednesday.
"I have also demanded that whatever subsidy is announced, it should reach the common man; power discoms should not get any benefit from it. Also, there should be an inquiry into the cost structure and pricing mechanism adopted by the discoms," Nirupam said.
A source from the government's energy department doubted the possibility of power tariff being slashed for domestic consumers in Mumbai in the near future. "The structure and functioning of discoms is totally different in the two cities. In Delhi, the government has stakes in the three discoms. In Maharashtra, it will be difficult for even MSEDCL to introduce a subsidy in a metro city, not to speak of private operators," the source said.
"Also, the government cannot lower tariffs in the guise of public interest, thereby discriminating against consumers of other commodities. Neither can it ignore residential consumers in other districts," said a consumer rights activist.
Former BEST committee member Ravi Raja said the undertaking, which supplies 980 MW of power daily to 10 lakh consumers from Colaba to Mahim-Sion, does not need to depend on the state government and can seek a subsidy from its parent body, the BMC. "If there is political will, the BMC can give a subsidy to the ailing BEST and provide relief to at least 7 lakh domestic consumers by bringing down tariff in the island city," he said. BMC sources said the civic body has already planned a subsidy of Rs 350 crore for BEST's transport division and has no plans to give a subsidy to the power wing.
Power expert Ashok Pendse, who represents consumer groups at MERC hearings, said it was "practically impossible" for the state government to give subsidies to discoms. "First, the state does not have any stake in private players like Tata Power and RInfra. Second, there is no legal provision that allows the government to announce a reduction in tariff. It has to be done by the regulatory body, which in our case is the Maharashtra Electricity Regulatory Commission."
He said that to reduce tariff for residential consumers, one needs cross subsidization. "Will MERC increase industrial and commercial tariff to subsidize residential consumers in Mumbai?"
Chief Minister Prithviraj Chavan said his government set up a high-level committee headed by industries minister Narayan Rane to take stock of the power situation, and it has submitted its report. "We are processing the recommendations. We will place the report before the cabinet as early as possible," Chavan told TOI on Wednesday.
Courtesy: TNN
