Tata Power’s high-end users must pay more: State
To avoid an unfair tariff disparity between the Tata Power Company (TPC) and Reliance Infrastructure (RInfra), a state-appointed committee has recommended TPC’s new high-end consumers, who switched over from RInfra because of its expensive rates, be imposed a cross-subsidy fee.mumbai Updated: May 03, 2010 02:15 IST
To avoid an unfair tariff disparity between the Tata Power Company (TPC) and Reliance Infrastructure (RInfra), a state-appointed committee has recommended TPC’s new high-end consumers, who switched over from RInfra because of its expensive rates, be imposed a cross-subsidy fee.
The recommendation, if approved by the Maharashtra Electricity Regulatory Commission (MERC), will make power more expensive for TPC’s new high-end consumers, at the same time, helping reduce tariff for its lower-end consumers who form its mass base.
The government had set up the committee after RInfra and TPC intensified their battle for extra power.
In a letter to the government, RInfra had accused TPC of cherry picking consumers during the switchover.
TPC had denied it, saying high-end consumers like Mumbai airport, malls and commercial complexes chose TPC because it suited them financially.
RInfra had argued that the tariff for its 22 lakh lower-end consumers will increase further because it will continue to lose cross-subsidising high-end consumers to TPC.
A government source said levying a cross-subsidy fee on high-end TPC consumers will not only reduce selective switching over to TPC, it will also bring relief to lower-end customers of both companies.
The recommendation is part of a report that the committee has prepared to resolve the dispute between the city’s two utilities, which are fighting for extra power.
The committee has asked TPC to continue supplying inexpensive electricity to RInfra so that suburban consumers are not burdened with higher rates. RInfra may also have to buy extra power to make up for the 500 MW that it will no longer get from TPC. The extra cost will also be passed on to RInfra’s customers.
The committee has also considered the interests of customers of the Brihanmumbai Electric Supply and Transport undertaking by asking TPC to give the company 100 MW.