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Top Story - RInfra to hike power tariff in Mumbai

14 Sep 2010 Evaluate

Anil Ambani-led Reliance Infrastructure (RInfra) has increased its power tariff in the city by 3 per cent with immediate effect, which will be reflected in the September billing. The company has gone ahead with the hike after the Maharashtra Electricity Regulatory Commission (MERC), the state power regulator, lifted a stay order and gave a green signal to increase the tariff at a competitive price.

 

RInfra is the major power distributor in the suburbs, whereas Tata Power has its dominance across the city and BEST rules south Mumbai. MERC had earlier ordered a stay on the company's move to increase tariff in June 2009 following public allegations over inflated billing by RInfra.

 

The power regulator, however, lifted the stay order on Friday last after the Administrative Staff College of India (ASCI), a third party investigation agency appointed by the Maharashtra Government, released an audit probe report giving a clean chit to RInfra.

 

ASCI, in its report, said it had found no discrepancies in the billing accounts and that the tariff recovery, power purchase and capex were justified via-a-vis other business. It also added that the capex is commensurate with demand growth, quality of supply and technology.

 

The report also states that Power Procurement Procedure was found to be transparent even as the Retail Supply Tariffs (RST) of RInfra during 2008-09 went up due to procurement of about 27 per cent of power from external sources at high cost. This was necessitated after Tata Power, which also generates power, reduced supply to RInfra from about 760 MW to 500 MW.

 

Meanwhile, RInfra also stated that the Rs 2,000 crore arrears, which RInfra has on its accounts, would be carried forward to the next financial year and consumers might have to face a further tariff hike of 7 per cent.

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