Date:31/12/2004 URL: http://www.thehindubusinessline.com/2004/12/31/stories/2004123101800200.htm

Back Tata Power not to hike tariff this fiscal

Our Bureau

Mumbai , Dec. 30

TATA Power Company (TPC) will not increase electricity tariff for its retail and bulk customers in financial year 2004-05.

In its annual revenue requirement, which documents the company's proposed income and expenditure for the New year, filed with the Maharashtra Electricity Regulatory Commission on Thursday, TPC has said it will reduce fuel costs and operation expenses to improve financial performance.

The company has however, warned that it may have to increase tariff by 2.4 per cent in year 2005-06 if the regulator does not stop TPC's rival and bulk customer Reliance Energy from drawing power from a standby connection at Borivali in Mumbai.

According to a TPC spokesperson, REL has been regularly drawing power from the 220- kilovolt standby connection in the Mumbai suburb. Standby power is cheaper than regular supply.

"It (Borivali connection) is an arrangement for meeting REL's emergency needs only. But REL has used it as a regular supply point.

"It should either pay standby charges for using this connection or TPC may have to pass on the deficit it has to bear because of difference in standby and regular tariff from the ordinary customers as pass through," she said.

The State regulator had directed REL to restrict drawing power from the Borivali supply point to emergency needs, according to TPC officials.

The problem is part of the ongoing standby charges dispute between the two companies about how much REL should pay TPC for using the standby arrangement. The eight year-old dispute has led to innumerable cases in the Regulatory Commission, Mumbai High Court and even the Supreme Court.