Regulator allows Reliance Infra to hike power tariff in Mumbai

The Maharashtra Electricity Regulatory Commission has lifted its stay on the power tariff applicable to Reliance Infrastructure consumers, paving the way for the power utility to charge its consumers higher.Though Reliance Infra said the average tariff hike was three per cent and it would be no more than seven per cent for the residential segment, the hike in the 301 to 500 unit category is 12 per cent and for above 500 unit category,13 per cent. For the high-tension (HT) housing category, it is 18 per cent.The new tariff comes into effect immediately and will be borne by 28 lakh consumers of Reliance Infra, who are predominantly in suburban Mumbai.

Reliance Infrastructure said that for low-tension (LT) residential consumers, the hike for up to 100 units would be from Rs 2.85 to Rs 2.96; for 101-300 units from 5.15 to 5.56; for 301-500 from Rs 8.15 to Rs 9.16, which works out to 12 per cent, and for the above 500 unit category from 9.40 to 10.61, a rise of 13 per cent.Under the regulated regime the utilities operate, the regulator determines the tariff to be levied on submission of the annual revenue projections of power utilities.For LT commercial, it is Rs 7.95 per unit (Rs 7.65). For LT industrial (over 20 KW) it is down to Rs 7.95 from Rs 8.54. For HT housing it is up 18 per cent from Rs 5.16 to Rs 6.29. HT industrial is marginally up at Rs 7.56 from Rs 7.45. For HT commercial the reduction in tariff is 12 per cent at Rs 8.41 from Rs 9.54.

Reliance Energy, which operates in the suburbs, appears to have ensured that consumer interests are protected, given the high consumer attrition rate.High purchase costMr R. Mehta, Senior Executive Vice-President, Reliance Infrastructure, said the hike was more due to rise in power purchase cost. The company had closed its short-term requirement of about 450 MW till 2014. For the long term, discussions are on to finalise about 1000 MW, which could be expected in 48-60 months.For short-term requirements, about 500 MW purchase (spot) is done, which vary between Rs 5 and 6 a unit.

The stay was vacated by the regulator subsequent to the findings of the Administrative Staff Training College, which absolved the power provider/utility of disproportionate capital investment and purchase of power at higher rates to facilitate higher billing.Last year, the regulator ordered the probe following a government direction. The regulator also put R Infra tariff then on hold, following widespread public opposition to it.