Electricity bills of Tata Power consumers in Mumbai to reduce by 25-35%

As per Tata Power, the stay was sought on the ground that the tariffs calculated by MERC were "higher than they should be."

At least 7.5 lakh consumers of Tata Power in Mumbai will get 25-35 percent lower electricity bills than what they are paying now because of an interim order issued by the Appellate Tribunal of Electricity (APTEL).

APTEL is an autonomous body, which hears appeals against the orders of the adjudicating officer or the Central and State Electricity Regulatory Commissions under the Electricity Act, 2003.

In May, Tata Power approached the APTEL seeking a stay on the multi-year tariff (MYT) for 2023-24 and 2024-25 issued by the Maharashtra Electricity Regulatory Commission (MERC).

According to Tata Power, the stay was sought on the ground that the tariffs calculated by MERC were "higher than they should be." Tata Power's appeal has now been granted by APTEL and MERC's 2020 tariff order for the company will be applicable temporarily, till the time the tribunal comes up with its final order.

While it is unusual for a private company to go out and claim on its own that the cost of its product (electricity in this case) has been evaluated at a higher rate, sources said that Tata Power moved this petition in order to prevent migration of consumers to other discoms in Mumbai such as Adani Electricity Mumbai Ltd (AEML) and BEST.

The MERC's tariff order made AEML's power tariffs the lowest in Mumbai and Tata Power's the most expensive. As a result, consumers started migrating from Tata Power to AEML.

In fact, AEML received at least 3,000 applications from the customers of Tata Power for migration in April, May and June after the state regulator's multi-year tariff order.

AEML has over 50 percent market share in power distribution in Mumbai and the company has a renewable electricity penetration of about 30 percent resulting in cheaper costs incurred from power purchases.

In the interim period, that is till the time APTEL comes up with its final order, the tariff proposed by Tata Power to the MERC on March 31, 2020,  has now become applicable once again.

This tariff is 25-35 percent lower than the existing one and will be for the benefit of the consumers, Tata Power said in a statement.

Sanjay Banga, President, Transmission and Distribution at Tata Power, said, "This interim stay is a testament to Tata Power's dedication to delivering affordable electricity to the people of Mumbai. It validates our commitment to providing sustainable power at cheaper rates, and our customers will directly reap the benefits of this decision. We will ensure that the relief granted by the APTEL is passed on to our 7.5 lakh consumers, further reinforcing our steadfast commitment to fairness and affordability in all our operations.”

Nilesh Kane, Chief of Mumbai Distribution, Tata Power, said, “With a commitment to excellence, Tata Power has long been recognised for its dedication to providing power at highly competitive rates in Mumbai. Serving over 7.5 lakh customers in the city, the company's customer-centric approach remains the cornerstone of its operations. Hon’ble APTEL’s Order represents a pivotal opportunity to strengthen this commitment, ensuring the delivery of quality, affordable, sustainable, and reliable power supply that benefits both customers and the wider community.”