MERC Approves 18% Hike in C&I Tariffs for FY24 in Maharashtra to Recover Revenue Gap

The Maharashtra Electricity Regulatory Commission (MERC) has approved an 18% hike in commercial and industrial (C&I) consumer tariffs for the current financial year, FY 2024. The decision was made in response to a petition filed by the Maharashtra State Electricity Distribution Company (MSEDCL).

The tariff for high-tension connections will see an increase in FY24, with rates of ₹8.12/kWh for HT I (A) general connections, ₹8.43/kWh for HT I (B) seasonal connections, and ₹12.83/kWh for HT II connections.

The new tariffs will be effective from April 1, 2023, and FY25 tariffs will be effective from April 1, 2024. MERC has balanced consumer interest with the distribution licensee’s legitimate expenses and determined a revenue gap of ₹395.67 billion to be recovered through a revision in tariffs.

The average overall tariff hike for FY24 is 2.9%, and for FY 2024-25 is 5.6%.

The revenue gap was contributed to by various factors, including an increase in fuel costs, claims due to law and tax changes, a shortfall in renewable power availability, revenue loss due to COVID-19, a shortfall in reducing distribution losses, transmission system cost increases, and carrying costs. The Commission has taken measures to protect the interests of different consumer categories, including load factor incentives, prompt payment discounts, and night usage rebates.

The Commission has also retained the benefit of telescopic slabs and introduced new initiatives for agricultural billing and advice. The order has several measures aimed at promoting the use of renewable energy sources, such as incremental consumption rebates and demand charge discounts. The revenue gap has been converted from billion to crore.