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Web Exclusive | February 2013

Tata Power's plea for tariff revision in Mumbai

Requesting an increase in its present average tariffs Tata Power's distribution arm, with a consumer base of 3.30 lakh in Mumbai, has approached the Maharashtra Electricity Regulatory Commission (MERC) to increase its present average tariff of Rs 5.97 per unit to Rs 6.75 per unit for 2013-14, Rs 7.39 per unit for 2014-15 and Rs 8.05 per unit for 2015-16 at a rate of 10.46 per cent annually (CAGR).

However, despite the proposed rise in tariff the company in its filing has said there would remain a closing gap/surplus of Rs 971.21 crore. Apart from Tata Power, other distribution utilities in Greater Mumbai include Reliance Infrastructure (RInfra), BrihanMumbai Electric Supply and Transport (BEST) and MahaVitaran. BEST, RInfra and MahaViataran are soon expected to approach MERC for tariff revision. RInfra’s average tariff is Rs 6.70 per unit while it is Rs 8 per unit for BEST and Rs 6.50 per unit for MahaVitaran.

Tata Power said that the proposed hike in tariffs which is subject to MERC review and approval has been necessitated by significant rise in fuel prices the impact of cost incurred on developing Tata Power’s own last mile Low Tension (LT) network in Mumbai clubbed with continued incurrence of wheeling charges imposed on account of using a third party network and unrecovered costs over the past three years as the Company has not revised its tariffs for the last 3 years.

The residential customers at the lower end of the spectrum are least affected as is evident from the mere Rs 1.22 hike proposed.

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