The Maharashtra Electricity Regulatory Commission (MERC) provided major relief for over 23 lakh Reliance Infra consumers in suburban Mumbai when it decreed on 15-07-2009 that customers could continue to pay according to the old tariff.  MERC’s order will apply until it completes its probe into allegations of “inflated’ ’ bills and issues further directives, state energy minister Sunil Tatkare said. The MERC order stays the hike for 23 lakh out of Reliance’s 27 lakh consumers, and applies to all residential consumers (except those below the poverty line) and some commercial and industrial customers.

Tatkare said the increased tariff that many consumers had already paid this month would be “adjusted’’ . But it may be more complicated than it sounds. Reliance officials clarified that much of the hike was due to the fuel surcharge and additional power bought from outside the state. There’s another catch. If the MERC probe concludes the new Reliance bills are acceptable, then consumers who paid at the old rate may have to pay interest on the balance. MERC had hiked the Reliance power tariff by 7.5%, prompting the Shiv Sena to protest across the city.

The order for the first time makes Reliance power cheaper than that of BEST, as BEST consumers in the island citywhere MERC has hiked the tariff by 9.5%—will have to continue paying at the higher rate.

Tatkare also said MERC would investigate how much electricity Tata Power was selling in the open market. Reliance has been demanding this power for Mumbai.

He said the government was trying to make power tariffs uniform throughout the city, but added that the state would give no subsidies to companies . “The government has already submitted a proposal to the commission to start a trading company so that rates can be uniform,’’ he said.

The government had given MERC 15 days from June 25 to probe “inflated’ ’ bills. The deadline was extended to July 10 and then to July 20. Wednesday’s announcement suggests the probe may take even longer.

The commission will also look into allegations that Reliance’s meters are faulty, and will examine whether Reliance has inflated capital expenditure in its accounts.

Source - Economic Times