Hotel industry can buy cheaper electricity from other states: Tata Power

The statement came when hotel industry representatives slammed the company for selling costly power to Mumbaikars, in a meeting with the state Electricity Regulatory Commission

Why doesn’t the entire hotel industry buy their electricity through open access? This is what Tata Power asked the Maharashtra Electricity Regulatory Commission (MERC) on May 24 after hotel industry representatives questioned the high tariffs charged by the Tatas. Hotels charge consumers at least 7-10 percent more due to the rising power bills.

Tata Power said the hotel industry can go for open access. In this the hotel body can as a whole procure electricity from the open market using cables from a specific distributor. File picture for representation

On May 24, over 50 people from various organisations and individuals came forward to speak about their grievances against Tata Power to the MERC. The hotel industries body namely the Indian Hotel and Restaurant Association (IHRA) slammed the Tatas for selling costlier power to Mumbaikars.

“While on one hand the Tatas are buying electricity at Rs 4.60 per unit from their generating company, on the other hand their subsidiary in Gujarat is selling at Rs 2 per unit. Moreover the prices of raw material for generating electricity too are coming down, but then Tata Power continues to sell at costlier rates,” said Guruprasad Shetty, member, IHRA.

Sources from the association claim that electricity is a major component and that 7-10 percent of a bill given to a consumer comprises the cost of electricity. “Our monthly electricity bills come to Rs 40,000 for a regular hotel while an air conditioned one generates Rs 60,000. Under such circumstances it is the power distributor’s job to ensure that they sell power at reasonable rates. A good 10 percent hotels have shut down due to increasing electricity tariffs. The authorities should look at the finances of Tata Power,” said another member, Kamlakar Shenoy at the hearing.

Have open access
There are over 8000 hotels and restaurants in Mumbai which charge various taxes to their customers, who are already burdened. But Tata Power said if the hotel industry has so many problems, then they can buy electricity on ‘open access’. Under this the hotel body as a whole, can procure electricity from open market using cables from any specific power distributor.

“The IHRA can opt for open access and buy electricity at Rs 2 from other states. We support this,” said Ashok Sethi, Tata Power. This would mean that electricity will be brought in bulk by hoteliers, and it could also result in reduction of food bills. But the hoteliers are confused as to how can they do this.

The people also want electricity charged by a power distributor to cost less between 12 midnight and 6am when usage is least. The representatives of housing societies and slums claimed that they had shifted to Tata Power on the promise of cheaper power but now the bills are rising.

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