Tata Power: Significant tariff hike in Mumbai, impacting lower-end consumers

In a move that could have far-reaching implications for Mumbai consumers, Tata Power, the primary electricity distribution company in the city, has put forth a substantial proposal for increased power rates. 

The proposed tariff rationalization aims to bring about a more balanced structure but particularly affects lower-end consumers.

Proposed tariff changes

Tata Power plans to raise the rate per unit from Rs 3.74 to Rs 7.37 for consumers using up to 100 units per month. Those consuming between 101 and 300 units could see an increase from Rs 5.89 to Rs 9.31 per unit.

The Maharashtra Electricity Regulatory Commission (MERC) had earlier stayed a tariff structure implemented in July 2022, reverting to a 2020 structure. Without the stay, consumers might be paying Rs 6.53 per unit currently, making the proposed increase relatively lower.

Rationale Behind the Proposal:

– The existing tariff structure led to a significant difference between the lowest and highest consumption slabs, with high-end consumers subsidizing lower-end ones.

– This disparity resulted in the attrition of high-end subscribers to rival electricity providers like Adani Electricity Mumbai.

Objective of tariff rationalization:

– Tata Power aims to address the imbalance and achieve a more equitable tariff structure with the proposed rationalization.

Impact on consumers:

– Tata Power serves approximately 7.5 lakh customers in Mumbai, with 5.5 lakh being residential consumers using less than 300 units per month.

– The proposed tariff revisions are anticipated to significantly impact these residential consumers, potentially leading to increased electricity bills.

Stakeholder feedback and MERC’s role:

– Tata Power has proposed the tariff rationalization from April 1, 2023.

– Stakeholders, including consumers and advocacy groups, have a 15-day window to provide feedback to the Maharashtra Electricity Regulatory Commission (MERC).

– MERC may schedule a hearing based on the received feedback to further deliberate on the proposed tariff revisions.