Reliance Infrastructure proposes 5.26% tariff increase for 2016-17

Reliance Infrastructure (RInfra), which has a consumer base of three million in Greater Mumbai, has proposed an average tariff increase of 5.26 per cent for 2016-17. The company, in its petition before the Maharashtra Electricity Regulatory Commission, has argued that the hike has been proposed till 2019-20 to fill up the revenue gap of Rs 1,325.67 crore. MERC will discuss RInfra's tariff revision proposal at the technical validation committee and hold the public hearing before passing its order.

        According to the company's tariff proposal, of the three million consumers, around two million consume 0-500 units a month.

         They are expected to get a high-tariff shock. The company has proposed a tariff of Rs 5.93 against Rs 5.39 per unit for consumers with monthly consumption of 0-100 units, an increase of 10 per cent, for 101-300 units Rs 8.31 against Rs 7.69 (8 per cent), for 301-500 units Rs 9.78 against Rs 9.38 (4 per cent).

RInfra official, who did not want to named, told Business Standard that the tariff for 0-500 units can be comparable with its rival Tata Power for the low paying consumer category after the latter submits its tariff revision proposal in the mid April. As on date, Tata Power's tariff revised from June 1 last year for 0-100 units is Rs 2.05 per unit, for 101-300 units Rs 4.21 and for 301-500 Rs 8.42. Analysts say the difference in tariff if widened between two distribution utilities may lead to further migration of low paying consumers of RInfra to Tata Power. Since 2009 till date, nearly 500,000 consumers of RInfra from 0-500 units have shifted to Tata Power.

As far as high tension (HT) industry consumers is concerned, R Infra has proposed tariff of Rs 10.55 against Rs 9.85 (7 per cent), for HT commercial 1% decrease to Rs 11.29 from Rs 11.37 per unit and for metro and monorail Rs 10.26 against Rs 9.82 per unit (4 per cent).
RInfra has projected net aggregate revenue requirement comprising supply and wire business at Rs 7,075 crore with average cost of supply at Rs 8.60 per unit.
Reliance Infrastructure proposes 5.26% tariff increase for 2016-17 Reliance Infrastructure proposes 5.26% tariff increase for 2016-17 Reviewed by Money99 on 23:18:00 Rating: 5

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