Poor generation plan is responsible for the power hike

Though Shiv Sena’s violent agitation against power tariff hike appears to be for its own good than the public, according to experts, power companies cannot be let off the hook either.

Lack of willingness to increase power generation keeping in mind the ever-growing demand, rather than relying solely on purchase of expensive power from the private sector is the key reason for the tariff hike, say the experts.

For instance, Reliance Energy, which provides about 1450 megawatts (MW) to about 27 lakh consumers in Mumbai’s suburbs, has done very little to add to its capacity since 2005, the year when the city witnessed power shortage for the first time, according to Ashok Pendse, an expert in the sector.

“One third of Reliance’s demand is met through costly power purchase from private companies. However, it has not initiated any move to get power from cheaper avenues. It could have tied up with any of the big power projects which share 10% of their total capacity at a much lower rate,” Pendse said.

Experts have also pointed out that Maharashtra, with an average demand of almost 16,000MW, faces a shortage of approximately 5,000MW, while it’s capital Mumbai appears largely unaffected with very few power cuts.

However, the flip side is that the city has to pay a lot more for electricity due to the lacklustre planning by the providers. They buy power from the open market at rates which are as high as Rs9 per unit from private companies whose cost of manufacturing is as low as Rs1.50 to Rs2.