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Tribunal stays Maharashtra power regulator’s order on cross-subsidy levy

According to reports, Tata Power consumers in Mumbai who had shifted to its distribution network from Reliance Infra have got temporary relief.

The Appellate Tribunal for Electricity has stayed the Maharashtra electricity regulator’s order raising the cross subsidy surcharge payable by Tata Power customers, who had shifted to it from the Reliance Infra network.

The cross subsidy surcharge applies when the network of one operator is used by a consumer to draw supply from another electricity distributor or operator. Power consumers in Mumbai have the option to migrate from one distributor to another, as there are multiple operators in the city. The State regulator has the powers to determine the tariff and other charges which distributors incur for electricity distribution.

The increase in the cross-subsidy surcharge varies from Rs 0.26 to Rs 4.09 per unit.

Tata Power had appealed to the tribunal against the order passed by the Maharashtra Electricity Regulatory Commission (MERC).

On Friday, the tribunal said when the MYT (multi-year tariff) proceedings were pending, the State Commission had passed the order in haste. It had increased the surcharge exponentially and caused a tariff shock to consumers.

The tribunal said the surcharge is the difference between the tariff applicable and the cost of supply. Unless the tariff and the cost of supply are determined, the applicable cross subsidy surcharge cannot be determined.

The tribunal also made it clear that if the appeal does not succeed, the amount can be recovered by Reliance Infra subsequently from consumers.

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