Power to cost more in suburbs

MUMBAI: Consumers of Reliance Energy in suburban Mumbai (beyond Sion and Mahim) will have to pay more for uninterrupted power supply. Energy regulator Maharashtra Electricity Regulatory Commission (MERC) has revised REL’s tariff with effect from April 24. Except for those below the poverty line, almost all consumers of REL would see an increase in their monthly bills.

The MERC order allows the company to levy a ‘reliability’ charge in addition to the energy tariff for uninterrupted power supply in the suburbs. The additional tariff comprises a stand-by charge of 0.29 paise per unit across all categories of consumers and a charge for the expensive power being purchased by REL to keep suburban Mumbai free from load shedding. The power charge will vary depending on the category of consumers.

The new tariff structure will be effective until March 31, 2008, according to an MERC order passed on Tuesday on REL’s petition seeking multi-year tariff framework for the period from April 1, 2007 to March 31, 2010.

REL’s executive director Lalit Jalan said the tariff hike has been necessitated by a 75% rise in cost of power, which REL is purchasing at almost Rs 8 per unit. Mr Jalan, however, told ET that the tariff hike would not have a much of a bearing since 75% of REL consumers in suburbs consumed less than 500 units. “These consumers are also getting subsidies,” he said.

The impact of the revised tariff on a residential consumer drawing 75 units per month would be an increase of Rs 7 (including the effect of tariff hike and additional charges introduced by MERC) in the monthly bill. A residential consumer using 200 units per month (placed between 101-300 units category) will have to pay a bill of Rs 598 instead of Rs 570 per month now.

The MERC has approved a 7% increase in the charges for consumers using 300-500 unit per month and a steep 19% increase for residents consuming more than 500 units per month. The energy regulator has targeted high consumption for tariff increase, thus making a case for energy conservation.

The high-end energy consumers like multiplexes and shopping malls are in for a steep increase in tariff. The MERC has increased tariff for all multiplexes and shopping malls having a sanctioned load over 20 kW to Rs 8.49 per unit — a 32% increase over the existing rates. For instance, a multiplex consuming 1.10 lakh units per month for Rs 7.13 lakh now, will have to shell out more than Rs 9.4 lakh under the new tariff regime.

Industrial consumers using up to 20 kW will be charged an additional 17%, and those using more than 20kw 40% more. Power for advertisement and hoardings will be costlier by 34%.

The reliability charge introduced by the MERC applies to all REL consumers except those in the BPL category. The MERC has justified this levy by pointing out that REL consumers in Mumbai suburbs are getting uninterrupted power supply when the rest of the state is being subjected to power cuts.

This is in addition to the stand-by charge of 0.29 paise per unit. The reliability charge will include a levy for the approved cost of expensive power. However, users consuming less than 300 units per month have been exempted from the costly power charge.

REL generates 500 MW of Mumbai’s total peak demand of 2,700 MW and Tata Power Company (TPC) generates around 1,778 MW. Brihanmumbai Electric Supply and Transport Undertaking (BEST) distributes power in the island city, while REL services the suburbs.