BSES, the Reliance group-promoted power utility, has offered four options in its tariff revision proposal for the current fiscal (2003-2004) submitted for ratification before the Maharashtra Electricity Regulatory Commission.

It has also sought permission to recover payment towards standby charges (it pays to Tata Power Company) from its consumers. Three of the tariff options propose lowering of tariffs charged by BSES (between 1.3 per cent and 15 per cent), provided TPC is directed to reduce fixed charges and fuel adjustment cost it levies upon BSES.

The fourth option seeks an average increase in the billing rate by 5.8 per cent from Rs 3.94 to Rs 4.17 per unit if the reduction in TPC's charges, as sought in the first three options, is not provided.

According to the covering letter of the TRP: "We request the commission to order a reduction in TPC's bulk supply tariff to a realistic level with uniform tariffs to all purchasers of bulk power from TPC so that BSES' consumers do not subisidise consumers of other purchasers or that of TPC. We also request the MERC to allow BSES to recover payment towards standby charges from consumers and in the interim period grant adhoc relief to BSES in order to reduce the strain on cash flows."

The fourth option says: "The BSES will need to rationalise the tariffs to recover the estimated shortfall of Rs 145 crore (Rs Rs 1.45 billion) in the fiscal if the reduction in BST as proposed in two of the other options is not permitted. The total average billing rate will increase by 5.8 per cent from Rs 3.94 per unit to Rs 4.17 per unit."

According to the first option: "A reduction in TPC's fixed charge component of BST from Rs 1.36 per unit is needed, excluding tax on sale of electricity to Rs 0.63 per unit so as to match the fixed charge component of generation plants of similar vintage. Similarly, TPC should reduce its FAC from Rs 1.10 per unit to Rs 0.40 per unit to match that charged by BSES' thermal plant in Dhanu."

This way, BSES says, the base fuel charge will remain the same at Rs 0.77 per unit which will result in a total reduction of Rs 1.43 per unit from Rs 3.23 to Rs 1.80 per unit.

This, in turn, BSES says it will reduce its power purchase cost of Rs 515 crore (Rs 5.15 billion) comprising Rs 252 crore (Rs 2.52 billion) towards the FAC and Rs 263 crore (Rs 2.63 billion) towards energy charge.

"After meeting the shortfall of Rs 145 crore (Rs 1.45 billion) for fiscal 2003-2004, the balance Rs 118 crore (Rs 1.18 billion) of the energy charge reduction will be passed on to the consumers in the form of reduced tariffs. The total reduction in cost to consumers will be Rs 370 crore (Rs 3.70 billion) -- Rs 118 crore (Rs 1.18 billion) on account of energy and Rs 252 crore (Rs 2.52 billion) on account of FAC.

The average billing rate on 6,166 MU s will then decrease by Rs 0.60 per unit from Rs 3.94 per unit in fiscal 2003 to Rs 3.34 per unit, a reduction of 15 per cent.

The second option put forth by BSES seeks a reduction in the fixed charge component of its BST from Rs 1.36 per unit, excluding tax on the sale of electricity, to Rs 0.63 per unit so as to match the fixed charge component of generation plans of similar vintage, a reduction of Rs 0.73 per unit, while the FAC will remain the same at Rs 1.10 per unit.

"This will reduce the BST by Rs 0.73 per unit from Rs 3.23 per unit to Rs 2.50 per unit. The average billing will reduce by Rs 0.19 per unit from Rs 3.94 per unit in the fiscal to Rs 3.75 per unit, a reduction of about Rs 4.8 per cent," the BSES TRP said.

In the third tariff option, BSES seeks a rationalisation and reduction in TPC's BST base rate.

"TPC should reduce the fixed charge component of its BST to BSES from Rs 1.36 per unit excluding tax on sale of electricity to Rs 0.88 per unit so as to match the fixed charge component of the thermal plant at Dhanu, which is comparatively recent compared to TPC's plants......After meeting the revenue shortfall of Rs 145 crore (Rs 1.45 billion), the balance of Rs 28 crore (Rs 280 million) will be utilised to reduce BSES' tariffs to its consumers. The average billing will reduce by Rs 0.05 per unit from Rs 3.94 per unit in last fiscal to Rs 3.89 per unit this fiscal," the proposals said.