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Tata Power users to pay more

mumbai Updated: Jul 30, 2011 00:57 IST
Dharmendra Jore
Dharmendra Jore
Hindustan Times
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High-end power consumers, who have shifted from Reliance Infrastructure to the much cheaper Tata Power Company, will have to pay more by way of cross subsidy surcharge (CSS) from next year onwards.

In addition to the surcharge, consumers who have migrated will have to pay for Reliance’s regulatory assets like cost of buying power, that the company could not charge them for in the past.

The Maharashtra Electricity Regulatory Commission (MERC) on Friday approved the CSS and recovery of regulatory assets. MERC will determine the surcharge amount by the end of this year.

This assets-recovery will stop once the due amount is paid but the surcharge will continue to be levied if consumers continue to use the Reliance distribution network (that Tata power continues to use). There are 1.59 lakh such consumers. Only 5,031 use the Tata network.

In the past two years, high-end consumers shifted to Tata as it saved them at least 35% on monthly bills despite paying the wheeling (carrying) charges to Reliance. Now, surcharge and other recovery will add to their monthly bills. Tata will recover these charges and pay them collectively to Reliance.

Reliance had demanded the surcharge to maintain the existing level of cross subsidy which helps provide power at cheaper rates to its 22 lakh consumers with low monthly usage. The high-end consumers pay more for subsidising low-end users. Sources said that Reliance suffered an additional subsidy burden of Rs 450 crore a month in view of migration of consumers. Reliance argued that the migration created cross subsidy imbalance and feared that it could further impact bills of its low-end consumers.