Tata Power Hikes Electricity Tariff In Mumbai

Tata Power consumers in Mumbai will now have to pay 25% more for the electricity they consume. The Maharashtra Electricity Regulatory Commission (MERC) recently gave a nod to a 25% increase in electricity tariff for FY14. It has approved an average increase in tariff to Rs 5.26 from the existing Rs 4.19 for residential consumers, and will be effective from July 1, 2013. Tata Power is one of the three power distribution companies in Mumbai, the other two being BEST and Reliance Infra which are also in a fray to follow suit.

The Commission has approved Tata Power’s Tariff Plan 2016. It also allowed an increase of 15% for FY15 and 11% for FY16 for residential consumers. For FY15, the average tariff for residential consumers has been increased to Rs 6.07 while that for FY16 to Rs 6.74. Tata Power had proposed an increase of Rs 6.44 for 2014-15 and Rs 7.02 for FY16.

According to the new tariff plan for FY14, consumers in the below poverty line category will have to pay 10 paise per unit, while the tariff for 0-100 units has been fixed at 26 paise, 101-300 units at Rs 1.85 and for those consuming above 500 units, the tariff has been fixed at Rs 5.91.

The wheeling charges for all these categories have been fixed at Rs 1.87 per unit. The Commission has also revised the tariff for low tension commercial as well as high tension consumers for the period. The impact of cross subsidy surcharge for consumers migrating from R Infra network to Tata Power is, however, not clear in the tariff order.

The order may be better for the financials of the company and the market has taken it in a jovial manner too. The stock ended with gains of 2.73% at Rs 88.40. However, Tata Power did not respond to our calls for comments on this development.