Maharashtra's electricity users to pay more as fuel adjustment charges rise

Nearly all the electricity users across categories in Maharashtra will be paying more for every unit of electricity they consume over the next four months, power utilities said on Friday.

The Maharashtra Electricity Regulatory Commission (MERC), the sector regulator, has approved discoms' requests for accumulated fuel adjustment charges (FAC), which will result in higher payouts.

The FAC charges are for higher costs borne by discoms in arranging power either by way of paying higher charges for short-term power supply or imported coal, which surged because of geopolitical tensions, experts pointed out.

Consumers will have to pay the higher FAC for four months till November 2022 billing cycle, industry sources said, adding that the actual payments will differ from discom to discom, and also as per the category a consumer falls under.

An official from the state-owned Maharashtra State Electricity Distribution Company (MSEDCL) said the increase is as per the MERC order.

"The FAC duly approved by MERC is due to the recent sharp rise in prices of electricity in the short-term market," a spokesperson for Adani Electricity said, adding that its efforts are on to lower the FAC.

A spokesperson for rival Tata Power said it is "taking adequate measures to effectively dilute accumulated FAC amount and is working towards optimizing the power purchase cost".