BEST GM hints at hike for low-end customers

May 09, 2014, 22:10 IST | Shashank Rao

With Tata Power entering the power supply market in south Mumbai, the undertaking fears high-end and new customers will opt for it; the civic power and transport body already has huge debts

It’s not the best of times for the BEST. With Tata Power set to enter the power supply market in south Mumbai, the enterprise fears that its high-end consumers — those who use more than 301 electricity units — as well as high rises and commercial complexes will opt for Tata Power.

The fact that they are buried under mounting loans running into many hundreds of crores only worsens the BEST’s outlook.

To begin with, the BEST is no longer the sole power distributor in island city — from Colaba to Mahim/Sion. Officials feel that although in the long run the situation would normalise, it’s the initial years of adjusting to competition from Tata where the challenge lies.

“There are chances that in the next 3-4 years, Tata will have their substations near new buildings and malls, where there are high-end consumers. This would result in low-end consumers suffering, as these high-end consumers had been cross-subsidising until now,” said O P Gupta, general manager, BEST.

According to BEST officials, at least 65 per cent or 6.56 lakh of its 10 lakh consumers utilise anywhere between 0-300 units. And officials don’t mind this bracket of consumers switching to Tata Power, as a majority of their earnings comes from those that use 301-500 units and above.

Moreover, the BEST has been cross-subsidising its losses in the transport wing from the revenue of the power supply wing.

Over the last year or so, electricity consumers have been bearing these losses by paying something called Transport Deficit Losses (TDL), which is a component added to their power bills.

Power experts say
Power experts say the number of electricity users subsidising transport losses will come down with Tata’s entry. “The TDL will be chargeable only to limited people who remain with the BEST,” a power expert told mid-day.

The BEST has taken loans to the tune of R3,100 crore from different banks. Every month, it pays an interest of R26 crore. Even the BMC — BEST’s parent organisation — has given it a loan of R1,600 crore, which is included in the total loan component.

But “taking loans is a routine process”, says Gupta.

Moreover, the BEST doesn’t have any money to pay the salaries of its 47,000-odd employees, which is an amount totting up to around R160 crore.

The expenses of BEST, too, are mounting every year, which, for 2013-14, has touched R1,566 crore, up from R1,470 crore in 2012-13.

TDL tariff

The Transport Deficit Losses (TDL) that BEST charges as part of power bills:
>> 0-100 units: R0.55
>> 101-300 units: R1.03
>> 301-500 units: R1.44
>> 500 units: R1.85

10 lakh
Number of power consumers in island city — from Colaba to Sion/Mahim — who buy electricity from BEST

Current power cost
Rs 3.85: Cost per unit charged by the BEST for customers consuming up to 100 units of electricity. R7.11 is charged for those consuming up to 300 units

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