Mumbai pre-polls 'shock' - Tata Power proposes 201% tariff hike for low-end users

Mumbai, Jan 30

In a bolt from the blue ahead of the elections, Tata Power Co. Ltd. has proposed a huge increase in the power rates for Mumbaikars, particularly the lower-end users as part of a tariff rationalisation initiative.

The average hike proposed is 12 per cent across all consumer groups in 2024-2025 but the worst-hit would be low-income residential consumers and below poverty line users with proposed hikes of a staggering 201 per cent and 89 per cent, respectively, though high-end users and certain public service users will be getting some relief.

As per the distribution company's media announcement, the Tata Power plans to hike the rate per unit from the present Rs 3.74 to Rs 7.37 for subscribers consuming up to 100 units per month (201 percent).

For those consuming between 101-300 units, the proposed hike in rates is from Rs. 5.89 to Rs. 9.31 (66 percent).

The proposals include: Below Poverty Line families: 89 per cent tariff hike; 0-100 units: 201 per cent; 101-300 units: 66 per cent; 301-500 units: 10 per cent; and Group Housing Societies: 41 per cent.

Other sectors that could witness increases are: EV charging stations: upto 71 percent tariff hike; Commercial consumers: 8-25 per cent; Industrial consumers: 25-38 per cent; and Public services: upto 82 per cent, barring some categories.

Certain categories could see some relief: High-end Residential users with more than 500 units consumption per month: 5 per cent cut in tariff; Large public service clients within the HT Public Service Category: up 18 percent reduction in tariff; and Metro and Monorail: up to 29 per cent slashed tariffs.

The massive hikes and partial reliefs come less than a year after the company secured an average hike of 11.88 per cent (2023-2024) and 12.19 per cent (2024-2025) in April 2023.

Tata Power’s previous tariff hike approval last year (April 2023) was challenged before the Appellate Tribunal for Electricity (APTEL), which ruled in the company's favour this month (Jan. 2024), paving the way for the latest tariffs proposal.

The Maharashtra Electricity Regulatory Commission (MERC) has sought public suggestions/objections for the new proposals with a public hearing scheduled on February 27 before its final decision in the matter.

Tata Power presently serves around 7.50 lakh consumers in Mumbai, with 5.5 lakhs being residential users who usually consume less than 300 units per month.

If cleared, the proposed steep revision in tariffs is expected to add a significant load on the consumers' bills from April – at the height of the election season.

Coming just ahead of the parliament and assembly elections this year in the state, the tariff hikes move is expected to get a thumbs down from consumer groups as well as political parties.

Moreover, there is the likelihood of its potential impact on the consumers of other power distribution companies operating in the country’s commercial capital.