labels: power, reliance energy
REL's tariff revision opposed before MERC news
Nisha Das
25 March 2004
Opposing the high capital expenditure of Rs 1,220 crores proposed by Reliance Energy Ltd for 2003-04 and 2004-05 for Mumbai, Prayas, an NGO, said the power utility was making more capital investments in Mumbai than in Delhi where there was greater need for it.

Appearing before the Maharashtra Electricity Regulatory Commission (MERC), during the public hearing of REL''s proposal for electricity tariff revision for current and next fiscal, Prayas representative, Girish Sant, said that the investments incurred costs to consumers and there was no guarantee of benefits.

The utility was making half the investments in its New Delhi operations as compared to Mumbai, said Sant and asked MERC to analyse the need for investment in comparison with other utilities and ground realities in Mumbai.

BSES had virtually no debt for its Mumbai operations which was extremely expensive for consumers as they had to pay an extra Rs 207 crore per year due to bad leveraging, he said asking MERC to adopt a normative debt equity ratio of 70:30 for the company.

REL in its reply said the investments were made for technology upgradation, growth and for competition which the company might have to face in future.

Tata Power Company said that REL was overestimating its procurement of power from TPC and till February 2004 it had taken only 2700 million units when it had proposed to take about 3,600 megawatt units till March 2004.


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REL's tariff revision opposed before MERC