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Tata Power, a company that provides electricity in Mumbai, has suggested changes to the tariffs, which are the prices people pay for electricity. The proposed changes could result in a significant increase in power rates, especially for those who use less electricity, known as lower-end consumers.
According to the proposal, the cost per unit of electricity would go up from ₹4 to ₹8 for people using up to 100 units per month. For those using between 101 and 300 units, the rate would increase from ₹6 to ₹10 per unit. The company justifies this increase by explaining that the earlier tariff structure was stopped, and now they need to make adjustments to balance subsidies between consumers who use a lot of electricity (high-end consumers) and those who use less (low-end consumers).
A Tata Power official mentioned that the Maharashtra Electricity Regulatory Commission had put a stop to the previous tariff structure in July, going back to an older one from 2020. If it weren't for this stop, consumers using up to 100 units per month would have been paying ₹7 per unit instead of the current ₹4. The official explained that previously, high-end consumers were paying over Rs 7 more than low-end consumers, and this difference was used to subsidise the rates for those using less electricity. Hence, the proposed "rationalisation" aims to address this subsidy imbalance.
The official also acknowledged that some high-end customers had shifted to a competitor, Adani Electricity Mumbai. Currently, Tata Power serves 8 lakh customers in Mumbai, with 6 lakh being residential customers who typically use less than 300 units a month.
The proposed changes are set to take effect from April 1, and stakeholders, which could include customers and other interested parties, have 15 days to provide feedback. If needed, the Maharashtra Electricity Regulatory Commission can also organise a hearing on the matter.
Tata Power wants to adjust the electricity prices in Mumbai, suggesting an increase in rates for lower-end consumers to address imbalances caused by the pause in the previous tariff structure. The company believes this adjustment is necessary to ensure a fair distribution of subsidies between consumers who use different amounts of electricity.
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