RInfra terms objections ‘misleading’, ‘cherry-picking’

The turf battle between the two private sector electricity distributors (discoms) in Mumbai has intensified with Tata Power accusing Reliance Infrastructure of misleading the public and resorting to backdoor tactics to inflate tariff.

Tata Power has already launched a customer acquisition campaign to woo customers to its network. In the last three months, the company said it has got 26,536 customers to switch over to its network and claimed that it has a further 15,000 applications seeking to shift.


In Mumbai, consumers are allowed to switch electricity providers. This does not require new cabling as wheeling charges are collected for connectivity if the service and network providers are different. Tata Power has about four lakh consumers and RInfra, 27 lakh.

In February, RInfra invited suggestions and objections from the public to its petition submitted to the Maharashtra Electricity Regulatory Commission for approval of multi-year tariff up to FY’16 . This is a regulatory requirement.

The purpose of issuing the public notice is to inform consumers about the tariff proposals of the licensee and the impending tariff.

Tata Power used the public response channel to register its charges on its competitor’s tariff working, which has multiple components, including cross subsidising low-end consumers (less that 300 units) with higher tariff levied on top-end consumers such as malls and commercial offices. Leave it for the regulator to decide, said a senior official, when asked whether a competitor/discom is also part of the public/ consumer.

Tata Power also said that it has conveyed its observations to the regulator to protect the interests of its large base of changeover customers who are on RInfra’s network and have chosen to switch to Tata Power to get electricity at lower cost.

“We believe that the proposed tariff by Rinfra is anti-consumer and anti-competition as it interferes with the customer’s right to switch over to a competitive tariff provider,” it said.

Not right

Tata Power felt that the public notice issued by RInfra did not reflect the correct tariff which consumers would ultimately pay because RInfra had not included the regulatory asset charges (charges that have been deferred by the regulator for collection in subsequent years) that it intends to collect. The details include a ‘K’ factor, which works out to 14.44 to 34.68 per cent, depending on the category of consumer, it charged.

Similarly, wheeling charges, the charges for using one licence network for connectivity to another network, is also inflated, Tata Power said.

In response to the charges, a RInfra spokesperson said, “The public hearing process of RInfra is approved by the MERC and the hearing is already underway. Tata Power’s objections on tariff are misleading and against the interest of smaller consumers of Mumbai. RInfra supplies to 21 lakh smaller consumers, whereas Tata Power is cherry-picking only high-end consumers. MERC has already warned Tata Power of cherry picking high-end consumers.”


(This article was published on April 7, 2013)
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