Considering a major chunk of RInfra’s consumer base of 27 lakh is residential, of which 22 lakh are subsidised, the hike could come as a shock for many suburban consumers.
It’s time Mumbai’s suburban consumers braced for higher power bills. The state’s power regulator, the Maharashtra Electricity Regulatory Commission (MERC), has just lifted the stay on the new tariff proposed by Reliance Infrastructure (RInfra) for 2009-2010. Consumers will have to shell out 3% more towards electricity bills on an average.
The hike may look small, but it is set to get bigger. Consumers are likely to shoulder the burden of RInfra’s past arrears amounting to roughly Rs1,500 crore with interest and other dues. The company will be filing its ‘annual revenue requirements’ within four weeks.
Considering a major chunk of RInfra’s consumer base of 27 lakh is residential, of which 22 lakh are subsidised, the hike could come as a shock for many suburban consumers.
Acknowledging that a hike is imminent, Lalit Jalan, chief executive officer of RInfra, said it would be spread over many years. “I would not like to speculate what would be the tariff till MERC passes an order. However, we are trying to find ways to recover the cost without giving a shock to consumers,” said Jalan.
Jalan’s optimism notwithstanding, the hike could spell bad news for RInfra as it would see a revival of migration of consumers to the Tata Power Company (TPC) network.
As per Rinfra’s own analysis, the migration to the TPC network had dropped by 90% from 2,272 consumers in December, 2009, to 200 this week.
The MERC’s move followed the clean chit to Rinfra by Hyderabad- based Administrative Staff College of India (ASCI). ASCI was appointed to investigate the company’s business affairs.
Rinfra, for now, is riding on the ASCI report on power purchase costs. ASCI said the company could not be held solely responsible for not entering into a power purchase agreement with TPC. The ASCI report states that Rinfra’s power procurement procedure was found to be transparent under the prevailing shortage conditions.
"Retail supply tariffs of Rinfra during 2008-09 have substantially gone up due to procurement of large proportion (about 27%) of power from external sources and procurement from the imbalance pool at high cost. This was necessitated due to reduction of supply by TPC from about 760mw to 500mw,’’ said ASCI, while analysing the issue of power purchase cost.
The report investigated Rinfra on three issues; power purchase cost, capital investments and expenses of regulated business vis-a-vis other business.
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