Even as the Maharashtra Electricity Regulatory Commission (Merc) stayed its earlier order permitting Reliance Infrastructure (RInfra) to raise power rates, energy minister Sunil Tatkare talked about ensuring a uniform tariff policy for the entire state.
Since Mumbai manages to get adequate supply by buying high-cost power from various sources, imposing a uniform rate may mean more load shedding for the suburbs.
RInfra’s tariff is based on the high cost of purchasing power from the market. With the suggested uniformity in rates possibly leading to reduced tariffs, the company might refuse to buy outside power. This may well translate into major power cuts.
Here’s how: RInfra purchases 500mw (which is one-third its requirement) from the open market at rates which are as high as Rs9 to Rs12 per unit. On the other hand, BEST, which supplies to the island city, has to purchase barely 100mw from the open market.
“In his attempt to introduce uniform tariffs, the minister has failed to realise that RInfra will have to bear the difference between the approved rate per unit as against the rate of power purchased,” said an industry expert. “For instance, RInfra has levied tariff at Rs9 per unit and BEST at Rs4 per unit. If the uniform tariff introduced is Rs5 per unit, RInfra will have to pay the difference of Rs4 per unit from its pocket.
This will dissuade the company from procuring power, leaving consumers from the suburbs to suffer load shedding.” With RInfra as sole supplier, clearly the suburbs will be most affected.
Tatkare said that a trading company will be formed by the government to implement the uniform tariff policy. Tatkare’s proposal can be traced to protests by suburban consumers against the “exorbitant tariff” of RInfra. With state assembly elections round the corner, parties like the Shiv Sena also launched a high-decibel campaign against high tariffs.
However, for the time being, there is relief for the suburban consumer. Merc’s stay on RInfra’s increased rates means that till a fresh order is passed, the existing tariff continues.
The order states that as per the directive by the state government, Merc had undertaken detailed investigation on metering, power purchase expenses and transactions undertaken by Rinfra and approved the tariff, but this will be stayed till the commission issues further orders.
Apart from political and citizen protests, state government intervention has resulted in the stay order.
