Some doubts correction in the billing method proposed by the Maharashtra State Electricity Board (MSEB).

There are a few doubts correction in the billing method proposed by the Maharashtra State Electricity Board (MSEB). 

The above picture shows that for 14-March to 14-April and from 15-April to 14-May, the billing amount is charged on the basis of average consumption as during lockdown it was not possible to take the reading. So last reading was "written on the bill" is 14-March and then the current reading is 13-June.  So the unit consumed is taken for period-> 14-March to 13-June (91 days). So the billing period (weight) is 91/30=3.03. And charges per unit for the slabs are increased from 31st March therefore for 17 days of March, the bill is charged on the basis of previous charges and then next days are charged on the basis of new higher rates. The adjustments are made so that the billing gets absorbed in lower slabs. So there is no issue of getting charged in the higher slab with a higher rate. So there is no issue regarding the slabs. But this bill is calculated on the basis of three months' consumption (91 days here) so last months (two months) bill amount is subtracted. And here are some issues regarding this subtraction.

Here are two methods one is used by MSEB where the amount paid in the last two months (i.e. average consumption) is subtracted from the total amount (first picture). Now the second picture i.e. above image, the method which I used for calculation: So instead of subtracting the two-month amount from the total calculation, I have subtracted the units consumed in the last two months (i.e. subtracting the summation of the average consumption of two months). And then calculated the billing with the same method (here old unit for old rates was 88 in MSEB bill. How they come to this 88 is not clearly mentioned neither on bill nor on the guidelines. On the basis of 88 units for 91 days in the first 17 days with a 3.03 period, 66 comes for 371 units (i.e. 491-60-60) for 91 days in the first 17 days with 3.03 periods. But this won't create the problem in this calculation as even if I put zero in old rate basket which will maximize the billing amount then also total billing amount is less than the amount calculated by MSEB). And the amount is very less than the amount calculated by MSEB. Almost 18% reduction in billing amount.

This is a fundamental difference. In the first method which is used MSEB, the calculations are done in a such way that the total amount will be maximized. Here we have slabs with increasing rates. So the amount calculated based on the average consumption will fall in the lower slab. So the total amount will be calculated by using this lower slab. Now even if the adjustments are made so that the units are falling in lower slabs (i.e. first and second) as the average consumption unit is not subtracted, the unit consumed going into the second slab is higher. Since this is a PUBLIC institution, the focus should be on the maximization of the consumer surplus.

Now the second point is that, in the middle of the pandemic, why the charges are increased?? Almost 41% amount is reduced when the billing amount is calculated based on the method proposed here with old tariffs.

And the last thing.. The unit consumed. the last picture compares the electricity consumption in the last year in the same month with the present year. The consumption is almost doubled in the lockdown. That also creates some questions. Yes, consumption is increased. There is no doubt. Every inside four walls will maximize the electricity consumption. But the question is.. What is the last reading? Was it taken in March or in February? Maharashtra State Electricity Board  (MSEB) must clarify the doubts about the reading date.

As far as the proposed methodology is concerned, I have discussed with people who know the calculations and methodology, they also agreed that units should be subtracted instead of billing amount. There might be mistakes in this approach. One has suggestions or doubts, then feel free to discuss. (Small calculation adjustment like rounding off can change the number with a small margin but that won't problematic for the methodology.