Even as the regulator is yet to decide the amount to be levied, R-Infra says it will benefit. "The only difference in tariff is the burden of cross-subsidy. Our power costs this year have been low and if the surcharge is added to it, our tariffs will be almost equal," an R-Infra spokesperson told Business Standard.
The rules allow a distribution company to charge high amounts to commercial and industrial users, and use the money to subsidise their low-end consumers, who take up to 100 units per month.
Reliance Infra has 2.1 million such low-end consumers of a 2.8 mn total. After Tata Power extended services to the area which R-Infra traditionally supplied, a number of commercial users who contributed to the subsidy moved to Tata. R-Infra says it lost 180,000 customers in the past 18 months and among these were also many high-end customers, who contributed to an annual subsidy of around Rs 400 crore. The more consumers it lost, the higher its rates became.
The company had blamed consumer migration as the reason behind its own higher rates (which made Tata's rates attractive) and now says the situation could be reversed. "We hope that the pace at which consumers are migrating to other networks will reduce, are we are also expecting reverse migration of customers," said a Reliance spokesperson.
"We have studied the order and yes, Maharashtra Electricity Regulatory Commission, has laid across a cross-subsidy surcharge for the changeover customers. However, the surcharge amount is yet not computed and is awaited.A clear picture on cross-subsidy surcharge will emerge for the customers once the amounts get announced. The customer will continue to find us an attractive supplier of choice," Tata Power said in a statement.
MERC has completed a series of public hearings on the matter and is likely to come up with a decision on the extent of surcharge to be levied, a determining factor on which company can offer the lowest rate and gain more consumers.
Source- Business standard