Decision on power rate cut in Mumbai discoms' court

The government has refused to provide subsidy to private utilities including Tata Power and Reliance Infrastructure

The Maharashtra government, which is under tremendous pressure from treasury and opposition party members and consumer organisations, has refused to provide a subsidy to private utilities Tata Power and Reliance Infrastructure to cut their rates in Greater Mumbai.

Mumbai power consumers would therefore have to further wait for the much-debated relief in rates as the government has put the ball in the court of the distribution utilities — the BrihanMumbai Electric Supply & Transport (BEST), an arm of BrihanMumbai Municipal Corporation. These companies have been asked to provide a map for providing relief in rates to Mumbai consumers.

Tata Power’s consumer base is 450,000 while it is 2.8 million for Reliance Infrastructure and one million for BEST.

The government has asked Tata Power,  R-Infra and BEST to revise their rates and bring it to a uniform level for consumers with a monthly consumption of 100-300 units. Besides, the government has asked these utilities to prepare a road map to bring down the existing tariff for these consumers.

Further, more consumers of R-Infra are to be allowed to shift to Tata Power, whose rate is low. Chief Minister Prithviraj Chavan said the government was quite keen that consumers of 100-300 units in Mumbai be brought down to the level charged by Maharashtra State Electricity Distribution Company.

Chavan informed that he had a meeting on Monday with the representatives of Tata Power, Relinace Infrastructure and BEST. ''These companies have assured to come back soon with their respective plans to carry out tariff cut in Mumbai.''  However, Chavan was non committal on providing any subsidy to them by the government.

According to Maharashtra Electricity Regulatory Commission’s orders issued last year on multi-year tariff, Tata Power’s per unit tariff for 2013-14 was revised upward, but was much lower at Rs 2.13 compared to Rs 3.93 a unit by Reliance Infrastructure for low-end consumers with monthly consumption up to 100 units. For consumption between 101 and 300 units, Tata Power’s tariff is Rs 3.62 a unit against Reliance Infrastructure’s Rs 6.84 a unit.

Incidentally, MERC in its another order, issued in October 2013, had ruled Reliance Infrastructure distribution’s 792,000 consumers with monthly consumption up to 300 units should be immediately transferred to Tata Power distribution. However, the order was challenged by Reliance Infrastructure distribution in the Appellate Tribunal for Electricity, which has stayed the MERC order.

The ruling Congress and NCP are divided over government subsidy to Tata Power and Reliance Infrastructure. NCP is quite vocal on this issue saying that it would creat a bad precedent. NCP spokesman Nawab Malik said that Delhi's power structure cannot be compared with Mumbai. ''In Delhi, the government has 49% equity while 51% by Tata and Reliance in three utilities there. However, in Mumbai, there is no government equity participation as the distribution is done by Tata Power and Reliance Infrastructure and in some areas by BEST,'' he added.

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