The Maharashtra Electricity Regulatory Commission (MERC) has permitted recovery of Rs 2,316 crore of regulatory assets by Reliance Infrastructure, which were created following stay in tariff orders and adjustment of costs factored in by the regulator.

RInfra said this recovery relate to 2004-2011 and was granted consequent to it petitioning the regulator.

The regulatory asset cost comprise tariff hikes stayed by the government totalling Rs 1,360 crore, besides the dues arising out of the cross subsidy surcharge, worked out on the basis of industrial and high end consumers subsidising the residential segment.

The MERC determines the tariff structure based on submissions made by discom, where the average tariff of the discom is arrived at factoring in input and operational costs, besides the subsidy component.

There have been instances when the regulator has asked the company to hold its tariff line and assured of recovery in subsequent years.

RInfra will recover the regulatory asset cost from all consumers connected to its network, including those supplied by Tata Power. The company said the recovery also attracted a carrying cost (prime lending rate of SBI).

Rinfra said MERC has also allowed levy of cross subsidy surcharge on all Tata Power consumers using RInfra network and that it would be applicable from the date the consumers shifted to Tata Power.

In Mumbai, commercial and industrial consumers subsidise residential consumers. Migration of predominantly high-end consumers to a competitor's network result into potential tariff shock to the residential segment.

Mr Lalit Jalan, Chief Executive Officer and Director, Reliance Infrastructure Ltd, said, “We are sincerely thankful to the commission for protecting the interests of our 22 lakh residential consumers.”

The company's stock closed at Rs 560.55 on the BSE on Wednesday after gaining 2.76 per cent.

Related Topics