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VIA Energy Forum : Presentation on “New Power Tariff” implemented from 1st Sept 2018

Presentation on “New Power Tariff” implemented from 1st Sept 2018

MERC has decided the new Power Tariff of MSEDCL, which is applicable from 1st September 2018. There are major changes in the tariff policy, which shall have impact on consumers’ power bills.

You are requested to kindly attend the presentation on “New Power Tariff” on Friday, 14th September, 2018 at 5.00 pm at VIA Hall, Udyog Bhawan, Civil Lines, Nagpur – 440 001.


Atul Pande



R B Goenka

Vice President


Prashant Mohota


VIA Energy Forum




Date: 12 September, 2018

Case No. 195 of 2017

In the matter of Mid-Term Review Petition of Maharashtra State Electricity Distribution Company Limited for Truing-up of Aggregate Revenue requirement (ARR) of FY 2015-16 and FY 2016-17, Provisional Truing-up of ARR of FY 2017-18 and Revised Projections of ARR for FY 2018-19 and FY 2019-20


  • Commission has considered most of the suggestions of VIA and issued a balanced tariff order against MSEDCL’s very high projections of deficiency in ARR to the tune of Rs. 34646 crore to be recovered in 2 years in addition to the existing tariff.
  • This proposal of MSEDCL would have impact of 25 to 40% increase in industrial consumers energy bills.
  • VIA objected and submitted to Commission that this will be a tariff shock which violates the appellate tribunal order
  • Commission approved revenue gap of Rs. 20651 crore and out of this Commission decided to create regulatory asset of Rs. 12382 crore and allowed to recover Rs.8268 crore through increase in tariff.
  • Commission allowed deferred recovery of such Regulatory Asset over and beyond the 3rd Control Period alongwith carrying cost, as allowed under the MYT Regulations.
  • Commission considered VIA’s suggestions and decided following.
  • Did not change definition of billing demand which could have very adverse impact on consumers energy bills.
  • Did not allow KVAH billing within this control period which could have raised consumers energy bills by more than 25% and the incentives of power factor would have been withdrawn
  • Commission did not change a provision of load factor incentive but did not allow to give load factor incentive to those consumers who will exceed contract demand during any time of the day including off peak hours.
  • One important change which shall affect consumers energy bills is that the power factor incentive has been reduced to 50% i.e. maximum incentive of 3.5% instead of 7% on unity power factor. Consumers will have to pay penalty upto 5% maximum on low power factor which may be lagging or leading .  Earlier there was not penalty for leading power factor and to maintain good power factor consumers will have to install automatic power factor correction panels.
  • On VIA suggestions Commission did not allow bulk discount rebate and rebate for new industry as this could have created discrimination within consumers and small industries would have been adversely affected.
  • VIA objected to gross metering in roof top solar system and imposition of surcharge on roof top solar system saying that it is a separate policy and can not be changed through MYT petition. Commission did not change the existing net metering system and did not impose surcharge.
  • Considering importance of accurate Agricultural consumption assessment, the Commission has decided to undertake Third Party verification of Agricultural Sales of MSEDCL which will be completed by March, 2020.
  • Commission has introduced a discount of 0.25% of the monthly bill (excluding taxes and duties), subject to a cap of Rs. 500/- per month per bill for LT category consumers for payment of electricity bills through various modes of digital payment such as credit cards, debit cards, UPI, BHIM, internet banking, mobile banking, mobile wallets, etc
  • Commission did not allow stand by charges to be imposed on CPP for stand by demand.



  • There is a high rise a demand and fixed charges to the tune of 25 to 30%.
  • The variable charges has been increased by 2 to 4%
  • Wheeling charges has been increased as below.
  • EHV consumers –  NIL
  • 33 KV consumer – 9 paise to 15 paise
  • 22 KV consumers – 82 paise to 38 paise (reduction)
  • 11 KV consumers – 82 paise to 78 paise (reduction)
  • LT category consumers – 118 paise to 130 paise



  • Commission has issued a balanced tariff considering a very high revenue deficiency projected by MSEDCL. By creating regulatory asset Commission avoided to tariff shock to consumers.
  • The overall impact on consumers energy bills would be 7 to 10% depending on working shifts i.e. for single shift consumers it will be more and for 3 shift consumers it will be less because high rise in demand charges.
  • The regulatory asset shall be recover in next control period of 5 years but the impact may be reduced because of lower power purchase cost, improving efficiency by MSEDCL, reducing losses, improvement in recovery and reducing expenses.


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