New kVAh billing norms in MERC order: Timely action crucial for commercial, Industrial consumers in Maharashtra

Mumbai, April 29: Consumers across Maharashtra, particularly those in the commercial and industrial sectors with sanctioned load above 20 kW, have been advised to review their electrical systems and take corrective action following the implementation of kVAh billing, now in effect as per the Maharashtra Electricity Regulatory Commission (MERC) Tariff Order.

Under the revised billing methodology, consumers are now billed based on apparent energy (kVAh) instead of only active energy (kWh). kVAh billing considers both active (real) and reactive (non-productive) energy consumption. Maintaining a high Power Factor (close to 1.0) is critical to avoid higher electricity charges.

This change is applicable to all relevant Low Tension (LT) consumers across the state.

Adani Electricity Mumbai Limited has advised its consumers to review their electrical systems and take corrective action following the implementation of kVAh billing.

"We have proactively identified consumers who may not have taken corrective action and are reaching out individually. While many have responded positively, sectors like banks and schools, which require internal approvals, may take longer," a spokesperson for Adani Electricity Mumbai Limited said in a statement.

Though the number of consumers impacted is limited, timely action is crucial on part of the consumers, he added.

This change is applicable to all relevant LT consumers across the state.

Consumers with low Power Factor may experience a significant increase in electricity billing, with assessments based on March 2025 consumption patterns indicating potential rises in their bills, if corrective measures are not undertaken.

The consumers have been advised to continuously monitor and maintain Power Factor and install or upgrade Power Factor Correction (PFC) equipment such as capacitor banks or APFC panels.

Besides, they have been urged to engage certified electrical consultants for assessment and corrective actions.

In case a consumer’s sanctioned load requirement is below 20 kW, then there is a need to consult their utility for the possibility of migrating to an appropriate tariff category, such as LT II-A.

Not all electricity drawn from the grid is used for productive work. Active Power (kWh) powers equipment like lighting, motors, and appliances, while Reactive Power (kVArh) supports voltage stability for inductive loads like motors and transformers but does not perform useful work.

Excessive reactive power leads to energy wastage and inefficiencies in the electricity network, now reflected under kVAh billing.

The Power Factor is the ratio of active power to total apparent power (kVAh). A Power Factor of 1 (unity) means all energy drawn is used efficiently. A lower Power Factor results in more wasted energy and higher billed units under kVAh billing.

Maintaining a high Power Factor ensures lower losses, better energy efficiency, and reduced electricity costs.

Capacitor banks or Automatic Power Factor Correction (APFC) systems help offset reactive power demand locally within a consumer’s facility.

Installing or upgrading these systems improves the Power Factor, reducing overall kVAh consumption and helping manage electricity bills efficiently.

The move to kVAh billing promotes responsible energy usage by discouraging unnecessary reactive power draw, ultimately benefiting both consumers and the grid through improved energy efficiency, reduced network losses, enhanced reliability and service quality. It also leads to a more sustainable and cost-effective energy ecosystem.

Reader Comments

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Rajesh K.

This is actually a great move by MERC! We've been using capacitor banks in our factory for years and it's saved us 12-15% on electricity bills. More industries should adopt this 💡

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Priya M.

As a small business owner, I wish there was more awareness about this change earlier. The article mentions March 2025 assessments - that's not much time to make adjustments. The utilities should conduct workshops.

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Amit S.

Can someone explain in simpler terms how this affects regular commercial buildings? We have a 25kW load for our office - do we need to panic or is this manageable?

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Sunita P.

While the intention is good, the implementation seems rushed. Many schools and hospitals operate 24/7 and can't just shut down to upgrade electrical systems. There should be some grace period for essential services.

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Vikram J.

Our textile unit installed APFC panels last year - best decision ever! Bills reduced by 18% and the investment paid back in 11 months. Highly recommend others to do the same 👍

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Neha T.

The article is informative but could use more practical examples. How much would bills increase for say, a medium-sized restaurant or a small manufacturing unit? That would help businesses prepare better.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.