Anil Ambani’s Reliance Infrastructure, which had been losing ground in the battle for power supremacy in the Mumbai licence area against Tata Power, seems to have finally discovered an ace up its sleeve.
The company feels the cross-subsidy surcharge (CSS), to be levied on customers who migrated to Tata Power, will eventually help RInfra to bring back its lost customers, apart from raking in additional revenues.
In a September order, the Maharashtra Electricity Regulatory Commission (MERC) had said that if high-end consumers of a supplier move to another one under open access system, they will have to continue to cross subsidise the lower-end consumers of their previous supplier.
Also, a consumer who is permitted open access will have to make a payment to the generator, the transmission licensee whose transmission systems are used, distribution utility for the wheeling charges and, in addition, the CSS, it said.
“While we are already adding over 1,000 new customers every year, we hope the cross-subsidy surcharge will eventually lead to reverse migration from Tata Power by the next year,” said Lalit Jalan, chief operating officer and whole-time director, RInfra, during a conference call with the media on Tuesday.
Jalan said at current levels the CSS will also bring in revenues of Rs100 crore annually.
The MERC order allowed RInfra to levy a CSS, ranging from Rs0.26 per unit to Rs2.79 per unit to customers who have migrated to Tata Power.
RInfra has been allowed to levy a CSS in the range of Rs0.26 to Rs2.22 per unit for HT consumers and Rs0.83 to Rs2.79 per unit for extra high voltage. Also, MERC had allowed a levy of surcharge ranging from Rs0.84 per unit to Rs1.90 per unit on non-domestic LT consumers, and additional Rs0.03 per unit from residential consumers with single phase connection and consuming 500 units and above.
After the order, RInfra expects that most of its high-end customers to come back to the company as they are the most hit by the surcharge due to high consumption. In fact, it was their high demand and inflating electricity bills which forced them to move to Tata Power, it said. The migration to competition has hit Reliance Infrastructure hard as it showed a drop in energy sales for the quarter ended September 30.
RInfra’s aggregate electricity sales dropped 15% to 2,060 million units in the quarter ended September 30 as against 2,415 million units in the same period of the last fiscal.
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