Mumbai Tata Power customers to see increase in electricity rates starting April

Tata Power’s Mumbai customers will face a 24 per cent increase in electricity bills starting April 1, according to the Maharashtra Electricity Regulatory Commission. This hike was necessary due to under-recovery from a stay on tariff, with potential for a 13 per cent decrease if no stay had been in place. Tata Power, the distributor, serves 7.63 lakh customers in Mumbai and suburbs. Majority, 94 per cent, fall within the residential category.

A Tata Power spokesperson stated, “MERC has approved a revised tariff for FY 2024-25, resulting in an overall increase to recover past gaps up to FY 2023-24. Despite this, our residential tariff for the 0-100 category remains the lowest.” However, an energy expert predicts that some consumers may switch to other providers due to the significant tariff difference.

The MERC order also mentioned a full recovery of Wires ARR approved against 50 per cent claimed by Tata Power. The Electricity (Amendment) Rules, 2024, do not allow deferment of revenue gap, impacting Rs 155.99 crore. Additionally, the company did not consider a refund of Rs 346.79 crore for the period between April to June 2023, further affecting revenue.

Tata Power might witness a migration of consumers despite the tariff increase, leading to continued fixed payments under power purchase agreements. The company’s commitment to quality power supply and cost optimization could potentially result in tariff reductions in the future. As the tariff hike will reflect in May bills, the impact on consumer behavior remains to be seen.