Sucheta Dalal :Switching to Tata Power means additional savings for consumers
Sucheta Dalal

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Switching to Tata Power means additional savings for consumers  

November 24, 2009


Many electricity consumers of Reliance Infrastructure Ltd (RelInfra) in Mumbai have applied for a switchover and some have even switched to Tata Power Ltd’s connections in north Mumbai, an area that was exclusively serviced by RelInfra or the erstwhile BSES. The main driving force for this change is the big difference in the tariff rates and thus the final bill. How much do consumers gain by switching over?
Here are some useful findings from an Excel sheet worked out by Sandeep Ohri, the activist who has fought hard for the switchover of power connections in Mumbai. On a monthly consumption of 350 units, consumers can save around 20% on their monthly and yearly power bills. The present RelInfra bill would be around Rs1,857 for the same consumption and the amount will be reduced to Rs1,489, translating to a saving of Rs369. While these figures were worked out for 350 units, the percentage of savings could be higher for a higher consumption pattern.
Though this is the present situation, monthly bills of RelInfra users could increase, if the Maharashtra Electricity Regulatory Commission (MERC) lifts the present stay on the new tariffs introduced by RelInfra in June 2009.
Keeping this increase in mind, the switchover customer is likely save an additional 33% by switching over to Tata Power.
As per the old MERC and Appellate Tribunal for Electricity (ATE) orders, if RelInfra plans to recover Rs1,079 crore from its existing customers, those who have switched over could save another 19%. “Total annual revenue requirement (ARR) for FY10 is calculated at Rs6,677 crore. The 'uncovered gap' carried forward is Rs1,079 crore and only Rs5,598 crore was allowed by MERC's  June order, which was also stayed. Hence this 19.3% is another increase hanging on consumers' heads,” explains Mr Ohri through his Excel sheet.                                          

The saving does not stop at this figure. If RelInfra gets the High Court to lift the cap of 67 paise on fuel adjustment charge (FAC), the RelInfra FAC will be higher at 113 paise. With a higher FAC of 113 paise, customers who have switched to Tata Power will be able to save another 10%.
Customers who have switched over from RelInfra to Tata Power will have to pay wheeling charges as per Reliance’s rates for using their infrastructure. However, if MERC rules that the RelInfra wheeling charges need not be paid as it has already been covered, it would translate to a saving of around 19% to the switchover customers. The comparisons have been made based on tariffs as of 26th October 2009
- Amritha Pillay [email protected]

-- Sucheta Dalal