Nagpur: The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has once again sparked controversy over its proposed electricity tariffs under the Multi-Year Tariff (MYT) petition. The Vidarbha Industries Association (VIA) has strongly opposed the proposal, warning that the new tariffs could negatively impact Maharashtra’s industrial sector, making it less competitive compared to other states.

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During a press conference at Udyog Bhavan in Nagpur on Wednesday, VIA representatives urged the Maharashtra Electricity Regulatory Commission (MERC) to reject MSEDCL’s Time of Day (ToD) proposal. The association argued that the new structure would significantly increase electricity costs for industries, already burdened with some of the highest power tariffs in the country.

Impact on solar rooftop installations

VIA also raised concerns about the potential impact of the revised ToD tariffs on solar power adoption. “Over the last five years, the cost of installing solar units has dropped by nearly 50%. However, the new ToD tariffs would extend the payback period for solar investments from three years to six years, discouraging industries from adopting renewable energy,” VIA stated.

Prashant Mohota, Chairman of VIA Energy Forum, along with President Vishal Agrawal and senior members Pravin Tapadia, Rakesh Surana, Girdhari Mantri, Ashish Doshi, and Pankaj Bakshi, collectively expressed their concerns over the proposed tariff hikes.

Key objections by VIA:

1. Higher Industrial Tariffs: VIA pointed out that MSEDCL’s petition proposes higher tariffs for industrial consumers while failing to address cross-subsidization issues.
2. Solar Net Metering Disadvantage: Under the proposed structure, industries will have to sell excess solar power to MSEDCL at ₹3–₹4 per unit but buy power at ₹9 per unit, making solar investments unviable.
3. Reduced Benefits of Solar Power: Currently, industrial users can utilize solar power for nearly 20 hours a day. Under the new proposal, this will be restricted to just 9 AM to 5 PM, forcing industries to rely more on MSEDCL’s expensive electricity.

Demand for private power providers

VIA also called for opening up Maharashtra’s electricity distribution sector to private players like Tata, Adani, and Reliance, highlighting that these companies provide power at lower tariffs in Mumbai compared to MSEDCL’s rates.

“If private companies can offer cheaper power in Mumbai, why can’t the same be extended to other parts of Maharashtra? Competition will ensure better pricing and service,” Mohota questioned.

MSEDCL’s financial burden and inefficiencies

VIA accused MSEDCL of failing to improve operational efficiency and instead passing the financial burden onto industrial consumers. “In the last MYT petition, MSEDCL claimed tariffs would be reduced. However, industrial tariffs at 33KV have increased by almost 50% in five years, from ₹5.90 per unit to ₹8.85 per unit,” said industrialist Pravin Tapadia.

VIA urged MERC to reject the MYT petition and instead direct MSEDCL to focus on:

• Reducing distribution losses.
• Optimizing power procurement strategies.
• Enhancing efficiency to lower costs for consumers.

Cross-subsidy concerns

VIA also emphasized the need to eliminate the excessive cross-subsidy imposed on industrial consumers, which they claim makes Maharashtra’s power tariffs uncompetitive. “Unlike Tata Power and Adani, MSEDCL calculates cross-subsidies unfairly, leading to inflated power bills for industries,” VIA stated, demanding urgent regulatory intervention.

Coal pricing and power generation issues

Apart from tariff concerns, VIA also pointed out inefficiencies in coal procurement and power generation:

• Coal Pricing Manipulation: VIA highlighted how imported coal is being procured at significantly higher rates and its costs passed on to consumers.
• Inefficient Power Generation: While independent power producers (IPPs) run at an 85% Plant Load Factor (PLF) using indigenous coal, MSEDCL’s generation units operate at just 65%-70%, despite blending imported and washed coal.
• Need for Efficiency: “MSEDCL’s own Khaperkheda unit operates at an 85% PLF using indigenous coal, proving that efficiency improvements are possible if policies are revised,” VIA noted.

Proposal for steep increase of Fixed Charges/Demand Charges on the consumers :

At present Fixed/Demand Charges of MSEDCL to HT Industrial Consumers are the highest (except 33KV and 132 KV consumers of Madhya Pradesh) in India. Present Demand Charges to HT-Industries for FY 24-25 are Rs.549 KVAh/Month and it is proposed a steep increase from Rs.600 KVAh/Month during FY 25-26 to Rs.750 KVAh/Month during FY 29-30. If these are approved, Demand Charges of MSEDCL would be the highest in India. Demand Charges of other Distribution Companies in India to HT Industrial Consumers either in KVA/Month or KVAh/Month in comparison to MSEDCL during FY 24-25 are as below :

VIA’s stance on MSEDCL’s MYT petition reflects growing concerns within Maharashtra’s industrial sector over rising electricity costs and policy inefficiencies. The association has called upon MERC to reject MSEDCL’s proposed tariff structure and implement reforms that encourage fair pricing, increased competition, and improved efficiency in power distribution. The decision by MERC in response to VIA’s demands will be crucial in determining the future of industrial power tariffs in the state.

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