Electricity bills to go up from this month in Maharashtra

Power consumers in the city and the rest of Maharashtra will again pay a fuel adjustment charge (FAC) in their monthly electricity bills. The state regulatory body had asked the utilities to suspend FAC, which is charged based on the varying price of fuel that is used to generate electricity, during the pandemic.

The Maharashtra Electricity Regulatory Commission (MERC) had asked the utilities to recover FAC later. The companies were asked to have individual funds to meet the extra expenses. But most of them have exhausted the reserves and have been allowed to charge FAC as per the MERC-approved cap. During a coal crisis, they had to pay more for fuel.

The power companies that need to recover the arrears will add FAC to the monthly bill, starting this month. It was not immediately known the average or per slab (of consumption) FAC to be charged, but Adani Electricity said its average cost will be 92 paisa per unit. Others did not disclose their rates.

Tata Power said it will start levying FAC in the electricity bill as per the rates approved by the MERC. So did Adani Electricity, BEST and MSEDCL. "According to the new slabs, the majority of Tata Power consumers in Mumbai will still draw cheaper tariffs in comparison to the others, barring the select categories that amount to a relatively small consumer base. Tata Power is taking adequate measures to effectively dilute the accumulated FAC amount and is working towards optimising the power purchase cost," said a Tata Power spokesperson.

Adani Electricity spokesperson said, "The FAC duly approved by MERC is due to the recent sharp rise in prices of electricity in the short-term market. However, with increased supply from our 700MW hybrid renewable energy PPA since August, our dependence on the short term electricity market has already reduced substantially. We are also taking additional measures to further reduce the cost of power supply, thereby our consumers can expect lower FAC in coming months."

Tata Power has to recover FAC of Rs 238 crore. Both Tata Power and Adani Electricity plan to recover the arrears in 5 months. The reason the firms are starting FAC recovery, is because around 60-70 per cent of Mumbai's power is fed from embedded generation to ensure reliability, and due to geopolitical situation, there is a rise in power purchase cost resulting in FAC accumulation.