APTEL stays MERC order on cross subsidy surcharge

The Appellate Tribunal for Electricity (APTEL) today stayed a MERC order increasing cross subsidy surcharge payable by Tata Power customers migrating from Reliance Infra's network.

Also Read: Adani Power commissions third 660 MW unit of Maha plant

"If the MERC order to increase CSS (cross subsidy surcharge) is not stayed, the appellants (Tata Power and others) will have to pay surcharge which is increased by four to ten times for commercial consumers in LT and HT categories, respectively," APTEL said in its order.

"If the appellants do not succeed, the amount can be, recovered by R-Infra, subsequently from the consumers. (Therefore) we deem it fit to grant the stay of the impugned order of May 10 so that the status-quo which was prevalent prior to the order will be maintained till the disposal of
these appeals," it said.

The Tribunal further observed that unless the tariff and the cost of supply are determined, the applicable CSS can not be determined.

MERC in its order dated April 4 had said it would decide about CSS in the multi-year tariff (MYT) proceedings. "When the MYT proceedings are still pending, as the orders are not yet pronounced, the State Commission passed the order in haste, contrary to its earlier order by increasing CSS exponentially causing tariff shock to the consumers.

"The CSS is the difference between the tariff applicable and the cost of supply. Unless the tariff and the cost of supply are determined, the applicable CSS can not be determined. The current level of cross subsidy will require the cost of supply presently determined and the tariff corresponding to the cost of supply determined," it said.

Tata Power had filed a petition before the APTEL seeking stay on MERC's order on the cross subsidy surcharge. Reacting to the interim stay, Tata Power said, "This stay order is a step in the right direction to safeguard consumer interest as the proposed increase prevents customers from shifting from RInfra and interferes with the customer's right to switch over to a competitive tariff provider."

It further said, "the idea of allowing multiple operators in Mumbai was to allow consumers to benefit by competitive prices being offered by different service provider."