Sucheta Dalal :Mumbai: The power tariff rampage
Sucheta Dalal

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Mumbai: The power tariff rampage  

July 15, 2009


Mumbai, the financial power center, is reeling under high power tariffs; mainly there are complaints from customers of Reliance Infrastructure (RelInfra). Most consumers in Mumbai suburbs from Bandra to Bhayandar and Chunabhatti to Vikhroli and Mankhurd are in the process to change their electricity supplier.
The reason, unwarranted or unjustified, tariff hike by RelInfra, the Anil Dhirubhai Ambani group company. For an average residential (LT-1 category as per MERC guidelines) customer who uses 100 units of electricity, RelInfra is sending a bill of Rs391. This is almost 90% hike from September 2006, when the same consumer used to get a bill of just Rs205 for 100 units!
At present, there are three electricity suppliers in Mumbai. RelInfra (erstwhile Reliance Energy), which bought Bombay Suburban Electric Supply Ltd (BSES), supplies electricity to more than half the city. Tata Power Co Ltd, supplies electricity, to limited areas as well as to some bulk consumers while Maharashtra State Electricity Distribution Co Ltd (MahaDiscom) provides electricity to few extended suburbs.
At present, RelInfra charges Rs7.06 per unit, BEST Rs6.34, Tata Power Rs4.46 and MahaDiscom between Rs2.5 and Rs6 depending upon the category of the consumer.
Based on these rates the average monthly bill for 100 units from Tata Power comes at about Rs205, BEST bill at Rs261 while RelInfra bill comes at a whooping Rs391. When you compare the monthly average bill from other suppliers, the RelInfra bill appears to be originated from 'Mars'!
While some unorganised groups have opposed the tariff hike by RelInfra, even political parties like the Shiv Sena has asked the consumers not to pay the hiked bills and dared the company to snap the connections.
Many of the RelInfra consumers now wants to shift towards Tata Power, however, there are some hurdles. One, Maharashtra Electricity Regulatory Commission (MERC), the de-facto authority has give permission to Tata Power to accept these consumers from RelInfra and second, although Tata do provide electricity to many consumers in the city, they do not have the necessary infrastructure to supply electricity to each and every consumer in Mumbai.
Besides, Tata Power also needs to get a proper request from the consumers, societies or establishments. Under the section 43 (1) of the Electricity Act 2003, the consumers in some areas fulfilling the eligibility conditions, have the opportunity to choose their power supplier and the chosen company has to provide electricity within 30 days.
One interesting point, even though a company does hike electricity tariff, it is the MERC which approves it in the first place. So the question is how and why MERC allowed RelInfra to hike the tariff to 91% in just three years? That too, when MERC, as per their order in October 2006, has frozen power tariffs for all the companies which supply electricity to Mumbai. Despite the frozen tariffs, RelInfra, for instance, was able to get approval for hikes from MERC under the pretext of adjustment in rising costs of fuel and capital expenditure.
On the other hand, the Maharashtra government is now working on an action plan for uniform electricity tariff, especially for Mumbai. But what is a uniform tariff, no one is willing to reveal. Is it the plan to bring RelInfra tariff at par with others or whether the other providers will have to raise their tariffs to match the ones charged by RelInfra?
Also after the rampage at various offices of RelInfra, the state government has asked to MERC to check, if RelInfra has overcharged its consumers. It looks quite odd, the authority, who has been giving green signals for all the hikes, is now probing whether it allowed the company to overcharge its customers.

What would be the results is anybody's guess. We are just keeping our fingers crossed. - Yogesh Sapkale [email protected]    

-- Sucheta Dalal