Maharashtra mulls AAP-style power tariff cut, sets up committee

Close on the heels of the newly-elected Aam Aadmi Party government effecting a 50 per cent reduction in power tariff for low tension power consumers in Delhi, the Congress government in Maharashtra is planning to emulate the AAP in a bid to win the next round of polls in the state.

The Arvind Kejriwal-led AAP government in Delhi yesterday announced a 50 per cent reduction in power tariff for those consuming up to 400 units every month.

Chief minister Prithviraj Chavan today announced the setting up of a committee to look into the issue of a reduction in power tariff in Mumbai.

He, however, insisted that that the decision has nothing to do with the AAP decision to reduce power tariff in Delhi.

The chief minister announced the decision while responding to a letter written by Congress MP Sanjay Nirupam demanding a reduction in tariff for those consuming less than 500 units of power per month, ahead of the 2014 Lok Sabha elections.

The MP had also demanded an inquiry into the cost structure and pricing mechanism adopted by power distribution companies on the lines of audit of discoms planned by the AAP in Delhi.

Mumbai and its suburbs gets power supplies from Reliance Infrastructure, Tata Power, Brihanmumbai Electric Supply & Transport (BEST) and the state-run Maharashta State Electricity Distribution Company (MahaVitran.

Reliance Infrastructure has a consumer base of over 2.8 million while Tata Power supplies power to 4.25 lakh consumers.

However, if the Maharashtra government decides to subsidize certain categories by bringing about uniform tariffs in Mumbai, the power distribution companies would have to be paid the difference upfront.

Under the Electricity Act 2003, state government may decide to subsidise any category of consumers by paying the difference between the tariff determined by the state regulator and the tariff that government desires.

The state government is already providing annual subsidy of about Rs3,000 crore to agricultural pump sets and Rs500 crore to power looms in Maharashtra on power supplied by MahaVitaran