Deconstructing power myths in Mumbai
People believe that the Maharashtra government can bring down the tariffs as per its desire. However, the power to determine tariff rates, is solely with the Maharashtra Electricity Regulatory Commission (MERC), as per the Electricity Act 2003.
THERE SEEMS to be a lot of misinformation being spread about, the Mumbai power tariff situation, which is leading to confusion in the minds of the people. This has translated to a lot of myths or beliefs that may not be true.
Firstly, many people believe that the Maharashtra state government can bring down the tariffs as per its desire. However, the power to determine tariff rates, is solely with the Maharashtra Electricity Regulatory Commission (MERC), as per the Electricity Act of 2003. The government can only, at best, grant a subsidy.
Further, the same Electricity Act, ensures that there is no uniform tariff in Mumbai, shattering another commonly held belief. In fact, the whole concept of 'competition' will become defunct is the tariff is the same for all suppliers. It would also lead to the government paying the supplier to hold the prices at a particular low level. This is what the Delhi government had been doing for the past three years, a subsidy that even they withdrew recently.
Meanwhile, it is believed that the lower rates only benefit builders and malls. Instead, these very builders and malls have to pay a much higher rate, partly on account of cross subsidy. This means that if the average cost of power is rupees four, then some users are charged rupees two to three and the others are charged rupees five to seven, to make up for the 'discount' to the lower users.
The EA 2003 and the National Tariff Policy have mandated that the level of cross subsidy is too high and must be brought down. Hence, the unusually high rates must come down and the lower rates would go up.
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