Maharashtra hikes cross subsidy surcharge

Maharashtra Electricity Regulatory Commission on 29th October 2013, rolled out an order which raises the cross subsidy surcharge (CSS) to a level which can be detrimental for the growth of power market in the state. This is MERC’s second revision to CSS charges in a single year. Such an increase in CSS is against Electricity Act 2003 and National Tariff Policy.

Recently, the Hon’ble Ministry of Power has also emphasized in an amendment to Electricity Act 2003 (refer) that respective  State commissions have the responsibility to specify a road-map for time bound reduction of cross subsidies. This move by the commission defeats the very purpose of open-access in power markets of India.

The exorbitant rise in CSS is well illustrated by a graphical analysis :

Fig: Graphical analysis of CSS hike

The order can be assessed here.

A relevant media article can be assessed : Business Standard.