RInfra plans to cut power tariff in 5 yrs | mumbai | Hindustan Times
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RInfra plans to cut power tariff in 5 yrs

mumbai Updated: Jun 09, 2011 01:32 IST
Dharmendra Jore

Though there may be some delay before Mumbaiites can choose between multiple power distributors, Reliance Infrastructure (RInfra), which currently supplies power to 28 lakh suburban consumers, is planning to cut down its electricity tariff and hold on to its users.

RInfra, which has the steepest power tariff in the city, is trying to make its rates the lowest in the next five years.

A senior state energy department official, who has studied the business plans of all five firms that have applied for licence to supply electricity to the suburbs, shared this information.

The bids are now with the Maharashtra Electricity Regulatory Commission (MERC), which floated the licence bid in 2010 as RInfra’s permit for the 384 sq km area expires this August.

Other than RInfra, the state-owned Mahavitaran, Ahmedabad-based Torrent, Indiabulls and Lanco are in the race. Tata Power already has a distribution licence for the entire city and supplies power at rates 30% to 40% lower than RInfra. But its tariff can be compared with the others’ only after it reapplies for licence, which expires after two years.

In monthly bills, the highest component is the electricity cost; other components such as fixed charge (as per monthly consumption), electricity duty, fuel adjustment charge, among other things are pre-determined by the MERC.

“RInfra has enlisted its various power purchase agreements in its business plan so that its average power cost will reduce from Rs4.34 per unit in 2012 to Rs3.35 per unit in 2016,” the official said.

The key reason RInfra will be able to cut costs is its tie-up with Reliance Power for 1000MW by 2016 and an equal quantity from three other private entities. It also has its own 500MW plant in Dahanu.

Mahavitaran’s modified average cost is expected to range from Rs4.56 per unit in 2012 to Rs5.6 per unit in 2016. Torrent wants a licence only for the south zone (Bandra to Vile Parle), which is RInfra’s most lucrative division.

Its plan indicates its power purchase cost could be between Rs4.49 per unit in 2012 and Rs4.01 per unit in 2016, the official said. "Indiabulls’ power cost could be in the range of Rs4.12/unit to Rs4.34/unit,” he added.

Lanco has projected an average power purchase cost from Rs4.96/unit to Rs5.79/unit.