The chances of Mumbai scraping through this summer without power cuts seem slim. Whether it eventually does or does not, Mumbaikars can take pride in a painful statistic. The power they consume is now easily the most expensive in the world. Your local neighbourhood grocer, the cyber cafe owner and the businessman trying to build something of global scale out of the city are now billed roughly twice what a consumer pays in Japan and five times what their counterparts would pay in the US, France or China.

And if yours home uses up to 500 units or more of electricity a month, you end up paying more than twice what the Chinese do and one a half times what the American does. Here’s how the math works. At current prices, any business that operates in the city pays about Rs 11.50 for each unit of electricity. In dollar terms, that works out to 26 cents (assuming an exchange rate of Rs 44 to the dollar). Only a Japanese business pays anything close to that at 13 cents, or roughly Rs 5.72. The Americans, French and Chinese pay just a little over Rs 2 for each unit of electricity they consume for businesses.
If you are a home user, it may be cheaper, but only marginally so. Assume that you run a 1.5 tonne air conditioner at home for eight hours each night; you’ll end up consuming something in the region of 380 units each month. Add to this the other assorted appliances that are part of urban life and you easily end up using in excess of 500 units each month.
If you do, on average, the power company will bill you at Rs 6.50 for each unit consumed — in dollar terms, close to 15 cents. Juxtapose this number with the 6.9 cents it costs in China, 9.6 cents in the US and the 13 odd cents you pay in France to get a sense of highcost economy you live in. You’d be better off than Japanese and people in Europe who pay around 19 cents for power they consume at home.
On the other hand, if yours is an average home that uses something like 300 units of electricity a month, you’d be billed at Rs 4.50 per unit — or a little over 10 cents per unit. While that isn’t the most expensive power in the world, it isn’t the cheapest either.
The reason you get away with it is because your consumption is cross-subsidised by business units — a situation that would be unacceptable in any other part of the world where home users pay more per unit of electricity than businesses do. Says a spokesperson for REL, ‘‘These high costs are a function of two reasons. A lot of power is generated on the back of fuels like naphtha, an intermediate product created when crude oil is distilled.”

via Times of India