MERC approves accomulated recovery of Rs 2,316 cr for RInfra

• Regulatory assets to be recovered together with carrying cost at the rate of SBI PLR
• Cross subsidy surcharge prevent tariff shock to RInfra's residential consumers

Maharashtra Electricity Regulatory Commission (MERC) had recently issued an order on July 29, 2011 related to Reliance Infrastructure (RInfra) Mumbai distribution business tariff petition and related issues.

The order included :

Accumulated Recovery (Regulatory Assets) : MERC has approved the Regulatory Assets of Rs 2,316 crore created owing to staying of tariff order and adjustment of various costs in the process of review by MERC (process of Truing-up) for the period of 2007 to 2011. Regulatory Asset will be recovered from all the consumers who are connected to RInfra’s network including those supplied by Tata Power.

Carrying Cost : The recovery of Regulatory Assets will also attract the carrying cost at rate of SBI PLR till these amounts are recovered.

Cross Subsidy Surcharge : In Mumbai, the commercial and Industrial consumers subsidise the residential consumers. The migration of predominantly high end consumers to Tata Power results into potential tariff shock to residential consumers. In view of this, MERC has allowed a levy of Cross Subsidy Surcharge on all Tata Power consumers using Rinfra network. MERC also a state that this surcharge will be applicable from the date consumer has shifted to Tata Power.

Mr. Lalit Jalan, CEO & Director, Reliance Infrastructure Limited, while commenting on the development said, “We sincerely remain thankful to the Commission for protecting the interest of our 22 lakh residential consumers. We remain committed to offer our best services to Mumbai consumers.”