SC ruling may hit BEST’s low-end power consumers in Mumbai
May 10th, 2014

The Supreme Court’s decision to allow Tata Power to supply power in the island city may lead to an increase in tariffs for low-end BEST consumers in the medium term. But it may not impact bus fares, cross-subsidized by the transport undertaking. 

Eateries may lower rates by 5-7% due to cheaper power from Tata, restaurant owners in South Mumbai claimed. But those planning to switch from BEST to Tata may have to wait longer as the apex court stated that Tata will have to set-up its own distribution network. 

BEST general manager O P Gupta said, “Tariffs for low-end consumers will definitely increase as Tata will target high-end consumers. This will prevent us from supplying cheap power to low-end consumers.” 

Revenue expected on the basis of the multi-year tariff plan, approved by the Maharashtra Electricity Regulatory Commission (Merc), may decline. 

Low-end tariff charges are off-set partially because of the cross-subsidy generated due to revenue from high-end consumers, who are supplied power at higher rates. 

Gupta said the power tariff issue will not be clubbed with bus fares. He said, “We may approach Merc to ensure that Tata does not only eye high-end consumers. It should have an adequate number of low-end consumers too.” 

Guruprasad Shetty of Ahar, an association of over 8,000 restaurants and bars in the city, who had first petitioned Merc, said restaurants would save a minimum of Rs 15,000 a month if they shifted to Tata and they would be able to check recessionary trends and pass on benefits to consumers. 

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Source: TOI

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