City consumers have opposed Reliance Infrastructure’s demand that consumers who have moved to Tata Power Company (TPC) to avail of low-cost power pay the cross subsidy surcharge.
RInfra wants the surcharge to provide relief to its low-end consumers. The company has the highest number of domestic (below poverty line) consumers who are subsidised by high-end consumers. But, as one lakh high-end consumers have shifted to TPC, RInfra’s subsidy ratio has taken a big hit, which may result in low-end users paying more.
Consumer representatives, presenting their side at a hearing on Saturday on RInfra’s tariff revision petition, blamed RInfra for the crisis. They said consumers who shifted to Tata because of its low tariff should not be forced to pay more for RInfra’s fault.
“RInfra’s spiralling power purchase costs impacted suburban power bills. RInfra had not been prudent in securing long-term inexpensive power,” said MERC-authorised consumer representative Sandeep Ohri, at the hearing conducted by the Maharashtra Electricity Regulatory Commission (MERC).
Ohri said the company had not categorically shown how it would meet the requirement for its 28 lakh consumers from April, 1, 2011, because TPC has completely stopped supplying power.
The Mumbai airport complex that switched to TPC long ago, opposed the cross subsidy surcharge. “We have paid all charges to RInfra before migrating.” The airport is saving more than Rs 10 lakh per month by availing TPC power.
To this, RInfra representative said the company’s requirement had gone down because of the migration of one lakh consumers to TPC and hence it would not hike bills.
RInfra has not sought any hike for 2010-11. Tariff petitions for the current year are yet to be filed. But, the company demanded the cross subsidy surcharge.
Ohri, who made a detailed presentation, also questioned RInfra’s business model. “We have seen Rinfra doing all the wrong things.
Indiscriminate expenses, baseless growth rates, non-transparent functioning, inconsistent statements, unnecessary legal proceedings and a monopolistic attitude are to be blamed for the misery of consumers,” he said.
Some representatives spoke in favour of RInfra. They said the company should be allowed to recover cross subsidy surcharge to discharge its social obligation of providing cheap power to the poor.