At the risk of being unpopular, I would like to repeat that UNIFORM TARIFF is not the answer!
Not only does it negate the benefits of a competitive environment, it is also NOT permitted by the EA 2003, UNLESS the State Govt grants a subsidy.
When the State Govt grants a subsidy - this will eventually need to be collected (as taxes) from EVERY individual, whether he/she is an electricity consumer or not!
Here is an example of what will happen - the State Govt will effectively undertake to 'fund' these utilities for their 'obscene' rates, and make the general public pay for it, by increasing taxes!! The general public will never know HOW much was collected as additional tax to pay this Subsidy!
Suppose the Govt increases the taxes across many items - and ends up collecting MORE than the Subsidy amount??
In such a situation how can uniform tariff be 'consumer friendly'?
This is similar to leaving our environmental problems to our grand-children..."as long as WE don't have to pay, who cares" - right? Is this the LEGACY we want to leave behind?
We must move away from such 'protectionist' measures and let open market competition 'force' the prices down.
Many people wonder whether RINFRA's consumers switching to TPC would make a big difference. Here are some facts:
1. RINFRA's avge costs are higher than TPC and so the consequent cross-subsidy is a larger spread.
2. On a pure arithmetical basis, it IS more cost-effective for RINFRA's high consumption users, to switch to TPC.
Now, it may appear that TPC 'wants' only high-end consumers - which is not true, as any RINFRA consumer can switch.
There are 2 sides to any argument. One could assume that since RINFRA's higher consumers have moved, it would have raise the level for the rest of its remaining consumers. However, the other side of the story is also that the Demand that RINFRA has to meet will also be lower! Consequently it would have to purchase lesser of the 'expensive' power..
This can only be determined if a really SUBSTANTIAL no of consumers switch. As I understand it, as of date only about 3000 consumers may have completed the switchover. Which is too minuscule a no considering that RINFRA has about 2.7 Million consumers!
The issue is not about RINFRA or TPC being benefited - its about each one of US - each consumer - having a choice.
As far as RINFRA's costs are concerned, I guess MERC's investigation would throw light on whether they actually needed to spend all that money on the Mumbai electricity business .. or even if they actually DID spend that money on us - maybe it WAS diverted into the RINFRA group's other ventures.
Since they have admittedly, not been maintaining separate accounts, there is quite a likelihood that they took money from us and spent it elsewhere.
Trust I have thrown some light on the issue.
(Related news item here...)
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Uniform power tariff will cost government Rs3,000cr
Ashwin Aghor / DNA
Wednesday, December 16, 2009 2:16 IST
Mumbai: If the state government does decide to take power minister Ajit Pawar's recent announcement about introducing uniform power tariffs in Mumbai seriously, it will have to be prepared to bear an additional burden of Rs3,000 crore annually for the subsidies the city's four power suppliers will have to be provided to bring their rates on a par.
Last week, during the winter session of the assembly, Pawar assured the house that the government will explore the feasibility of uniform power tariff for the city. Uniform tariff is more consumer-friendly, and has already been implemented in cities like Delhi, Kolkata, Bangalore and Ahmedabad, despite them having more than one supplier.
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http://www.dnaindia.com/mumbai/report_uniform-power-tariff-will-cost-government-rs3000cr_1324178
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