It will be a new year bonanza for industry and commercial consumers of the Maharashtra State Electricity Distribution Company (MahaVitaran) as from April 1 onwards, they will get a refund of around Rs 100 crore which was recovered by MahaVitaran since September 1 to December 31, 2018, for poor power factor (PF).
Industry and commercial consumers who had paid penalty for poor PF will be entitled to such refund provided they make necessary changes and improve the PF of their consumption. This refund will be available only to the eligible consumers who operate in the specified PF limits.
Low PF increases the losses and improved PF was the sole criteria for PF incentives and disincentives introduced by Maharashtra Electricity Regulatory Commission (MERC) in its order on the midterm tariff review petition filed by MahaVitaran. The revised tariff came into effect from September 1 and since then MahaVitaran had levied penalty for poor PF. DNA had reported first on December 27.
The PF is a measure of how effectively you are using electricity. With the cut in the power factor, the industrial and commercial consumer is forced to use electricity far more efficiently than in the earlier case. If they fail to maintain they will have to pay penalty.
Industry bodies had argued that a 50 per cent reduction in PF incentive (to 3.5 per cent from 7 per cent) has severely impacted electricity bills citing that the power charges are higher than neighbouring states.
The MERC, in its ruling delivered on January 2 on a petition filed by Vidarbha Industries Association challenging the changes in PF norms, said that MahaVitaran had misinterpreted its earlier tariff order and imposed a penalty for PF more than 1. MERC has reversed it.
The MERC has given time up to April 1 to industry consumers to install the necessary equipment to maintain unity PF. Industry bodies had argued that reduction in power factor incentive was a structural change and they should have been given at least 90 days to upgrade equipment which needs to be imported. Instead, MERC has granted the industry and commercial consumers seven months time up to March 31 for correction and improvement in PF which in any case legal and mandatory responsibility cast upon the consumers.