Mumbai: The Anil Ambani-controlled Reliance Energy Ltd (REL) has revised energy tariffs upwards, hiking them by a maximum of 10.22 per cent, making power usage in suburban Mumbai more expensive.

The state power regulator, the Maharashtra Electricity Regulatory Commission (MERC) has given its approval to an average tariff hike of 10.22 per cent across categories for consumers of REL, the supplier in the suburbs. In its order on REL's annual revenue requirements and tariff proposal, MERC said the total revenue gap considered for determining the tariff was Rs457.4 crore in 2008-09, translating into an average tariff hike of 10.22 per cent.

That will mean that while residential consumers will shell out more for a 6.3 per cent hike, commercial consumers will pay around 15 per cent more.

MERC has formulated its recommendations in sync with its policy of punitive pricing on heavy power users, while sparing consumers who use less than 300 units per month. MERC is said to have approved the new tariff while acknowledging the lower allocation of cheap electricity to REL from Tata Power's 1,777 megawatt Trombay plant.

Tata Power's Trombay plant had supplied REL with 762 megawatts last financial year, but this year, with Tata Power will provide REL only 500 megawatts, as it has signed up 800 megawatts to REL's competitor BEST, and is retaining around 477 megawatts for its own consumers. Faced with a shortfall of 262 megawatts, REL will now have to purchase power from outside Maharashtra to meet its obligations. Consequently, MERC has approved a sharper tariff hike for consumers using over 300 units, with an additional charge under the head 'expensive power'.

As per MERC's order, tariff in the first slab from 0 to 100 units per billing cycle will now be charged Rs1.45 per unit. The second slab, between 101 to 300 units, will be charged at Rs3.75 per unit, and 'heavy users' consuming between 301 to 500 units per month will have to pay Rs5.75 per unit. Additionally, heavy users will also have to pay Re1 per unit as charges for getting 'expensive power'.

Consumers using over 500 units will now shell out Rs6.50 per unit instead of the erstwhile tariff of Rs6.10 per unit, besides the 'expensive power' charge of Rs1.50 per unit.

The tariff revisions are effective from 1 June.

REL has 26.5 lakh suburban consumers, of which 22 lakhs are residential consumers. According to REL, around 40 per cent of the residential component falls under the slum category.

In its order, the MERC says that if demand continues to grow at the present rate, it is most likely that the city of Mumbai, including REL's consumers, will have to face load-shedding during system peak hours, despite paying the reliability charges. Using this premise, the commission has continued with its punitive pricing model, using it as an in-built incentive to consumers to reduce their power consumption, as the impact on the bills is designed to increase as the consumption increases.