Power tariffs will be fixed for next 5 years…..Chittaranjan Tembhekar
Mumbai : Approximately two crore power consu mers acrossM aharashtra can look forward to uninterrupted power at reasonable rates from the next financial year.Beginning April 1,2011,any changein power tariffseither increase or decreasewill be fixed for each of the next five years.
On Wednesday,the Maharashtra Electricity Regulatory Commission (MERC) approved the multi-year tariff regulation replacing the old practice of yearly tariff hikes by power suppliers.
The experiment hopes to help consumers plan their power usage and saving in the long term.However,they must know that fluctuating fuel(coal&oil )charges or other contingency issues may be added to bills every six months following a state regulatory commission review.The control period for the new tariff regime will end on March 31,2016.
The new regulation alsoseparates wire and supply businesses to facilitate open access to power,thus paving the way for multiple power suppliers to create cheaper options for consumers.Currently,there are four suppliers in the stateBEST,TPC,RInfra,and MSEDCLand more may comein,sincethestateisindicating roping in other suppliers in Mumbai and state.
New tariff regulations are performance-based with due rewards for operational efficiency.In the new scheme,tariffs will be allowed to change only with change in values of selected variables (coal or oil charges ) and nonvariable parameters (capita cost) in a pre-determined manner.These will also force suppliers to get long-termcheaper power for consumers, said a senior MERC official.Once applicable,every year,MERC will review the structure to see whether it effectively meets consumer concerns.
In the new pattern,suppliers are supposed to submit a fiveyear business plan,whichwillinter alia require the utilities to project the demand-supply scenario,power procurement plan andcapitalinvestments required to achieve the desired operational efficiency and meet load growth requirements over five years.
The commission has also put a cap on charging operation and maintenance costs to consumers,controlling tariffs to an extent.
Unless suppliers enter longor medium-term power purchase contracts at optimum rates,loadshedding and high cost of power under short-term contracts will result in high tariffs, said the MERC official.Controllable or non-variablefactorssuch ascapital costs are specified and their trajectory must be endorsed by the utility and MERC before the final five-year tariff plan is announced.