Regulator allows RInfra to hike tariff | mumbai | Hindustan Times
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Regulator allows RInfra to hike tariff

A day after an independent probe cleared the business model of Reliance Infrastructure (RInfra), the Maharashtra Electricity Regulatory Commission (MERC) on Friday allowed the power supplier to implement the tariff hike that was approved last year.

mumbai Updated: Sep 11, 2010 02:42 IST
Dharmendra Jore

A day after an independent probe cleared the business model of Reliance Infrastructure (RInfra), the Maharashtra Electricity Regulatory Commission (MERC) on Friday allowed the power supplier to implement the tariff hike that was approved last year.

RInfra is expected to announce on Monday how it would implement the hike and recover arrears from consumers.

Hyderabad's Administrative Staff College of India (ASCI), who was conducting the probe, said in its report that the RInfra business model was correct and hence the hike it demanded was justified.

ASCI crosschecked allegations that disproportionate increase in RInfra's capital investment and costs of buying expensive power had facilitated hefty hikes.

MERC had stalled RInfra's hike after public outcry and a government directive last July.

The stay was vacated by the regulatory commission on Friday, following which the

hike is expected to increase monthly bills of consumers by 30-35 per cent in certain domestic categories.

In its order, MERC said that though retail supply tariffs of RInfra-D have substantially gone up due to procurement of large proportion of power from external sources and drawal from imbalance pool at high cost, RInfra should procure such power in an efficient and economical manner.

"The commission does feel that the electricity purchase and procurement process of RInfra, including the price at which electricity is procured, requires to be streamlined," said the order.

It further stated that electricity should not be purchased at unreasonable rates.

"RInfra should, therefore, look into all possible ways in which the above objective is met in order to ensure economic efficiency and protection of consumer interests," said the order.