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HindustanTimes Thu,10 Jul 2014

Reliance consumers won’t have to pay more for power

HT Correspondent, Hindustan Times   December 26, 2012
First Published: 02:09 IST(26/12/2012) | Last Updated: 02:11 IST(26/12/2012)

Reliance Infrastructure’s 23 lakh suburban power consumers across the city will not have to pay more for electricity.

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The Appellate Tribunal for Electricity (ATE) has rejected Tata Power Company’s appeal to exclude its high-end consumers, who have switched over from Reliance, from paying a cross-subsidy surcharge to protect Reliance’s low-end, domestic users from paying more.

The order was issued on December 21.

Tata had appealed against the Maharashtra Electricity Regulatory Commission’s directive in August that its high-end consumers would have to protect small consumers of other companies because otherwise it would disturb the field for healthy competition and increase the monthly bills of Reliance’s small consumers.

The two companies have been at loggerheads ever since Tata was allowed to supply electricity in the suburbs a couple of years ago.

While Tata did not respond, the Reliance spokesperson said the company is glad that ATE agreed with it that Tata was laying networks selectively and picking high-end consumers.

“The ATE order will save 23 lakh consumers from huge tariff shocks,” the Reliance official said.

Reliance has around 28 lakh consumers, of which 23 lakh are low-end consumers — 12 lakh live in slums. The low-end, domestic consumers are cross-subsidised by high-end users.

Around 60% of Reliance’s power goes to the cross-subsidised class. On the other hand, 90% of Tata’s customers are high-end consumers such as the railways, refineries, large housing and commercial complexes and multiplexes.

The tribunal also told Tata that it must lay down its own distribution network to supply power to new consumers. In most cases, the changeover consumers pay carrying charges to Reliance for getting Tata’s power, which comes at a lower rate.

The ATE order will not apply to Tata consumers who use its own network for availing electricity.

Tata’s two high-end consumers, Mumbai International Airport Pvt Ltd and Indian Hotel Restaurant Associations, had filed appeals in the ATE and are likely to challenge the verdict in Supreme Court.


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