Tata Power, R-Infra differ on power tariff

Tata Power seeks an average of 6% reduction, while R Infra pleads for an average of 18% rise in tariffs for Mumbai consumers

Tata Power consumers can expect an average six per cent reduction in their power rates. However, Reliance Infrastructure (R-Infra) consumers might be dismayed, as the company has sought an average 18 per cent rise in power rates. Both Tata Power and R-Infra distribution companies have said they have given their mid-term review (MTR) proposals for 2015-16 to the Maharashtra Electricity Regulatory Commission (MERC), which is expected to take a call by end of April or in May.

Tata Power has estimated an average power purchase cost of about Rs 4.25 per unit, excluding transmission and standby charges, for  2015-16. For R-Infra, it is expected to be about Rs 4.30 per unit for the same year.

Tata Power has about 600,000 consumers in the city and suburbs. At present, about 538,000 consumers are availing supply from Tata Power on R-Infra’s wires. Of these, 506,000 are residential consumers. About 87 per cent of the residential consumers use less than 300 units a month.

On the other hand, R-Infra supplies power to 2.9 million consumers, especially in the northern and western suburbs. Out of these, about 500,000 residential consumers have migrated to Tata Power. However, almost all these consumers continue to avail network service of R-Infra distribution.

For residential consumers, using power in the range of 0-100 units, Tata Power has not made change in the per unit tariff of Rs 2.62, while R Infra has proposed an increase to Rs 4.95 from Rs 4.88. Further, for the slab of 100-300 units also Tata Power has kept the per unit tariff unchanged at Rs 4.56, while R-Infra has sought an increase to Rs 7.58 from Rs 7.45.

For above 300 units, Tata Power has proposed decrease in per unit tariff to Rs 7.56 from Rs 8.19, while R-Infra has proposed a 9 per cent rise to Rs 9.10 from Rs 8.33. For above 500 units, Tata Power's tariff will fall to Rs 9.40 from Rs 10.27, while R-Infra has proposed a 4 per cent rise to Rs 11.15  from Rs 10.77.

As far as high tension industry consumers are concerned, Tata Power has proposed a reduction in per unit tariff to Rs 8.30 from Rs 8.82 and similar reduction is sought for high tension commercial consumers to Rs 8.60 from Rs 9.16. For R Infra, the tariff for high tension industry consumers is expected to go up to Rs 9.26 from Rs 9.05 per unit and for high tension commercial consumers to surge to Rs 11.23 from Rs 11.10 per unit.

Tata Power COO and executive director told Business Standard: “We have projected an additional revenue requirement (ARR) as part of multi-year tariff (MYT) (including expenses) for FY 2015-16 after doing a detailed working in line with the entitlements as per the MYT Regulations, which has been presented to MERC in the mid-term review petition. The ARR concept is always revenue neutral as per regulations which has been followed. However, the actual sales compared to projected sales and fuel cost variations are treated during annual tariff review (ATR)/MTR reviews.”

R-Infra spokesman said, "For FY15-16, R-Infra distribution has proposed reduction in energy charges of 8.5 per cent; however to prevent interest burden of Rs 1,000 crore on the consumers, it has also proposed recovery of past revenue gaps in FY 15-16. This is resulting in proposed tariff hike of 18 per cent. If the said recovery was spread over a span of six years, alike proposed by other licensee (Tata Power), then the tariff hike would be only 1 per cent for a majority of consumers categories."