State to review its plan for a power tariff increase, Raut says

Minister of State Nitin Raut has announced that he has given directives to review the request for a tariff increase submitted to the Maharashtra Electricity Regulatory Commission (MERC).

The outgoing Secretary of State had come up with a proposal to increase the tariff that had originally been agreed upon. Nevertheless, as an afterthought, the raise did not appear to be justified. Orders were given to review the move, the Minister told TOI on the sidelines of a function hosted by the Vidarbha Industries Association (VIA).

“The government must ensure that the common man will not be affected by any attempt to change the electricity tariff in the state. Nonetheless, in order to ensure a lower tariff, steps will also have to be taken to reduce generation costs, “said Raut.

RB Goenka, vice-president of VIA and also a consultant to the power sector organization, said that the proposal includes a revenue requirement of Rs60,000 crore to be recovered over a period of five years. In average, this would lead to an increase in power bills from 7% to 8%, he said.

Since the tariff increase petition has already been forwarded to the MERC, the Government will now either have to file a petition for review or withdraw the current request under section 108 of the Maharashtra State Electricity Act 2003, citing public interest. MERC has already given notices to consider objections to the request for a state tariff increase, Goenka said.

MERC is a quasi-judicial body whose approval is needed to implement any power increase, including by state-owned power utilities.

Earlier addressing VIA leaders, Raut said, “The state power utilities have been on hold due to the size of Rs35,000 crore from the farm sector. There are proposals to come up with a system under which farmers can pay fees on easy terms. At the same time, there are also large payments from government organizations. Strict action would be taken against such defaulters as power cuts in some parts of the day, “said Raut, who is also Nagpur’s guardian minister,” the previous government found promoting solar power as a challenge to thermal power plants. The point was that if solar power is used up, thermal plants would break down due to a reduction in the load factor.” “The rebirth after that leads to a major expense. It can not, however, be that way. State generation units do not supply power in Maharashtra alone. Plants can also operate on load due to demand from other states. Our government is not going to have an anti-solar power program, “he said.

Raut said that he also instructed the Divisional Commissioner (Nagpur) to establish a special purpose vehicle (SPV) to revive the National Industrial and Manufacturing Zone (NIMZ) in Bhiwapur, which was planned during the Congress-NCP rule. “Currently 2,600 hectares of land have been purchased for the project and the power supply can be planned,” he said.