Maharashtra: MERC Approves Power Tariff Hike Despite Multiple Lapses; Experts Question Misleading Claims of Power Cost Reduction

The Maharashtra Electricity Regulatory Commission (MERC) has approved MSEDCL's multi-year tariff hike petition despite pointing out multiple flaws in it. In fact, the commission itself acknowledged these issues in its order. However, the MSEDCL has claimed that there has been an average 10 per cent reduction in power tariffs for the year 2025-26. The commission expressed displeasure that MSEDCL included a Detailed Project Report (DPR) in its petition even though it was not been approved. The company proposed projects worth ₹49, 318.45 crore. As the DPRs were still pending approval, they had to be excluded from the tarrif filing causing delays in petition approval and increased financial burden.

The commission also questioned MSEDCL's power purchase estimates. The utility used the Re-source Adequacy (RA) model but did not get formal approval before filing the petition. As a result, the commission rejected power purchases worth ₹80,067 crore and 1.72 lakh MU (million units). Undervaluation of the power purchase cost led to increased fuel adjustment charges on the consumers.

Higher tariff for three months

The commission had decided on March 28 to approve the new tariff and make it effective from April 1. However, MSEDCL filed a review petition, leading to a delay. After a public hearing, the commission passed the final order on June 25 implementing the new tariff from July 1. Even though the MSEDCL claimed there was a general tariff reduction, consumers were made to use electricity with 10% higher tarrifs for three months.

Power not cheaper, but costlier, say experts

While the State government and MSEDCL have claimed that there will be an average 10% reduction in 2025-26 and 26% by 2029-30, experts find it misleading. According to Mahendra Jichkar, the claim of reduced power tariff is misleading as fuel adjustment charges are not being factored in. In reality, only the 0-100 unit slab for domestic consumers saw a rate cut. All higher slabs saw a 5-7% increase in tarrifs. Commercial rates rose by 4 per cent. Experts allege that MSEDCL is manipulating data and making misleading claims of reduction in power tarrifs.