Power tariff reduction in Mumbai is MERC's prerogative: Reliance Infrastructure

Reliance Infrastructure, which supplies power in Mumbai, today said reduction in power tariff is the prerogative of Maharashtra's electricity regulatory body MERC.

In a letter written to Maharashtra Electricity Regulatory Commission (MERC) and the Government of Maharashtra, a day ahead of Congress leader Sanjay Nirupam's hunger strike demanding power rate cut, Reliance Infrastructure said: "We are forwarding the letter received from Congress MP Sanjay Nirupam for your consideration."

Mr Nirupam, a Member of Parliament from Mumbai-North constituency, has announced that he will go on hunger strike, tomorrow, outside the company's Mumbai office demanding power subsidy for 23 lakh residential consumers.

"In view of granting subsidy in the state, if any, is the prerogative of Maharashtra government and tariff determination is the prerogative of MERC," the company said in the letter. We request you to please take appropriate steps."

Earlier this week, Maharashtra Cabinet cleared a reduction in power tariff by 15 to 20 per cent across agriculture industry and domestic consumers.

However, this did not help Mumbai consumers, as they receive no subsidy from Government of Maharashtra and pay more than Rs 2,500 crore each year to the state government as taxes on electricity (electricity duty and tax on sale of energy) the letter said.

Reliance Infrastructure said, "Supreme Court has also ruled that determination of tariff should be left to the expert body (MERC)."

The present tariff structure of Reliance Infrastructure has been determined by MERC in August, 2013. Fixed charges are part of tariff determined by the MERC, the company said.

Fixed Charges consist of meter reading, billing costs, part of the meter capital cost and some of the costs of maintaining and connecting to the electricity distribution system.