Tata Power proposes to hike price tariffs for low-end users in Mumbai

Tata Power has proposed a tariff hike for low-end customers in Mumbai through a newspaper advertisement to the Maharashtra Electricity Regulatory Commission (MERC), after almost four years of providing the same price tariff.

The proposed hike increases the price for consumers using less than 100 units to ₹4.96 per kWh from the earlier price of ₹1.65. The proposed price rises to ₹6.97 from ₹4.2 per kWh for 101–300 units. And, for 301–500, from ₹7.65 to ₹8.4.

On the flipside, the company has proposed a reduction for 500 and above units' consumers to ₹7.94 from the current ₹8.35 per kWh.

The company has termed this proposed hike as an attempt to 'rationalise' prices, as they have remained unchanged since before the COVID-19 pandemic began. However, other DISCOMs had availed of a MERC-approved hike last year, but Tata Power contested it, as it made the DISCOM uncompetitive with an average hike of 11.9% for FY23–24 and 12.2% for FY24–25.

A Tata Power spokesperson told CNBC-TV18, "Rationalisation of prices has become necessary as prices have remained unchanged and the difference between the lowest slab and the highest one (above 500 units) is over ₹7, wherein the high-end consumers have been subsidising the lower-end ones. The idea with this proposition is to bring the difference down. The proposed prices will bring the difference down to ₹3 (lowest slab at ₹4.96 and the highest at ₹7.94).

However, prices for the residential BPL (below the poverty line) category have also been proposed to hike from ₹1 to ₹1.89. This proposed hike may impact the slum dwellers of the city.

Additionally, this proposal asks for a 12% average tariff hike, citing an increased average revenue requirement of ₹0.88/kWh.