In case a large number of residential consumers switch over to TPC, the amount of subsidy enjoyed by its small consumers will be spread across all the new ones.
If you thought that switching over from Reliance Infrastructure (RInfra) to Tata Power Company (TPC) will ensure reduced electricity bills, think again.
If sources from the power industry are to be believed, the tariff for the first category of residential consumers with monthly consumption of 0-100 units will be cheaper in case of RInfra.
Industry experts say this is a temporary phenomenon, as the new tariff of RInfra has been stayed. However, there is a possibility that RInfra’s tariff might be lower than that of TPC in the future.
Currently, consumers are switching over to TPC as they want cheaper power tariff. But as TPC will charge 88 paise per unit as wheeling charges to the new consumers, it will hike the tariff instead of keeping it lower than that of RInfra.
Consumers will also be required to pay connection charges and security deposit which will further increase the cost. Nearly 20% of the industrial and commercial consumers subsidise 80% of the residential consumers in RInfra’s jurisdiction. The situation is the exact opposite in TPC’s case.
In case a large number of residential consumers switch over to TPC, the amount of subsidy enjoyed by its small consumers will be spread across all the new ones, thereby reducing the subsidy and bringing the tariff almost at par with that of RInfra.
RInfra’s high tariff is the result of the expensive power procured from the open market which is fluctuating. With large number of power plants projected in the country, there is a possibility that the market rate of power might go down to even Rs4.50 instead of the existing Rs9 per unit. This will also impact the tariff of RInfra.
On the other hand, TPC, which has a major generation in Mumbai, depends largely on liquid fuel, the price of which is driven by the international market.
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