Reliance consumers may have to pay less for power

Here is some good news. Electricity from Reliance Infrastructure (RInfra) may cost a little less in the next four years. Currently, the utility provides power at the rate of Rs. 7.48, which is Rs. 2 more than Tata Power Company (TPC).

Here is some good news. Electricity from Reliance Infrastructure (RInfra) may cost a little less in the next four years. Currently, the utility provides power at the rate of Rs. 7.48, which is Rs. 2 more than Tata Power Company (TPC)

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In its multi-year tariff (MYT) plan submitted to the Maharashtra Electricity Regulatory Commission (MERC) for approval on Thursday, RInfra has assured of bringing down the cost of supply below Rs. 6 per unit by 2016. RInfra’s MYT includes other costs related to capital expenditure and maintenance expenditure.

The MYT plan helps consumers know the hike the power utility would introduce in the financial year in advance. A company is allowed to raise tariff only when uncontrolled factors impact the business. The MERC will approve the plan after a public hearing at Rangsharda Natymandir in Bandra on August 21.

While TPC’s rate of selling power is the lowest in the city, suburban consumers may no longer want to switch from RInfra because the wheeling and cross-subsidy charges (CSS) might add to their monthly bills.

Consumers who migrated to TPC may have to pay more as RInfra has proposed CSS based on wheeling charges, losses and cost of power purchase for each year from FY 12-13 onwards in a formula prescribed in the national tariff policy, 2006. The CSS demanded for next four years is between Rs. 554 crore and Rs. 714 crore. Wheeling charges is a regulated fee that RInfra gets from migrated consumers who use its network to avail Tata’s supply.

RInfra faces tough competition from TPC, which is a parallel supplier in both suburbs and island city distribution area of the Brihanmumbai Electricity Supply and Transport (BEST).

Consumers in island city cannot migrate to another power utility because of a stay order issued by the Supreme Court (SC). The monthly bill of BEST has increased from this month because the SC has allowed it to recover its business losses from its consumers. The fourth supplier, Mahavitaran, which caters to some eastern suburbs, sells power at an average of more than Rs6 per unit.

An RInfra official said the MYT would lay the foundation of the tariff petition, which would be discussed at public hearings.

He added that the tariff existing as per MERC order dated June 15, 2009, would continue to apply till any further tariff revision.