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Home News Power Sector News Mumbai - MERC reduces tariff of BEST and Tata Power by 15%

Mumbai - MERC reduces tariff of BEST and Tata Power by 15%

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MumbaiThe new tariff rates for BEST and TPC consumers proposed by the Maharashtra Electricity Regulatory Commission (MERC) will be effective from the September billing. "The remarkable drop in BEST's tariff is because the company imported long-term cheaper and efficient power of about 800 mw for its consumers. BEST has also brought down transmission and distribution losses remarkably. This has ultimately impacted the tariff," said MERC secretary K N Khawarey.

By announcing these revised rates, MERC has successfully managed to end the war between R-Infra and TPC, as both power suppliers will now be competing on a near-equal footing, with only a marginal difference in tariff rates, especially in the higher slabs. "This increase will restrict high-end R-Infra power consumers from shifting to TPC," said an industry expert. Until now, customers-both commercial and residential-who consumed more units of power, found it economical to shift to TPC, whose rates in higher slabs were less than those of R-Infra's.

"This move by MERC will reduce the cross-subsidy burden on R-Infra's low-end consumers," said the industry expert.
To put it simply, residential R-Infra consumers requiring less power were enjoying lower tariffs, while commercial establishments were paying a higher price thereby subsidising costs for the company's low-end customers.

With the revised rates, the chances of R-Infra losing low-end consumers to TPC and retaining commercial consumers will increase.

"R-Infra has a huge low-end base, whose rates, as mentioned before, were being subsidized by high-end consumers. Now, when they shift to TPC, this cross-subsidy in R-Infra will be balanced," he added. Incidentally, last week, MERC had given its okay for a 7% hike in R-Infra's tariff, which will affect 21 lakh residential power consumers in the suburbs.

It's also worth noting that while street-lighting, hoardings and temporary connections for events for BEST consumers will drop by 11% to 17%, there is no similar relief for TPC consumers.

Source- Times of India


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