Units of Reliance Infrastructure Ltd. and Tata Power Co., which sell electricity in India’s capital of New Delhi, were allowed to increase tariffs, helping them purchase more power and invest in distribution networks.
The electricity regulator for the city approved an 8.3 percent increase for areas served by the companies, according to a statement today. The higher tariff will be effective immediately and would lead to an increase of as much as 0.26 rupees for every kilowatt hour of electricity used, according to calculations based on the statement.
The increase in prices will help retailers BSES Yamuna Power Ltd. and BSES Rajdhani Power Ltd., units of billionaire Anil Ambani-controlled Reliance Infrastructure, and Tata Power Delhi Distribution Ltd. end the financial year with a “marginal surplus,” Delhi Electricity Regulatory Commission Chairman P.D. Sudhakar said in a phone interview.
The tariff increase includes a power purchase cost surcharge of as much as 8 percent, approved by the regulator to compensate the three retailers for a combined revenue gap of 136.7 billion rupees ($2.3 billion) till March 2013, according to the statement. The deficit will be wiped out over the next five to six years, Sudhakar said.
“We plan to keep the distributors in surplus for the years to come so they have enough money to buy electricity and provide power to Delhi,” he said.
Reliance Infrastructure rose 0.9 percent to 786.85 rupees and Tata Power, India’s largest non-state generator, gained 3.4 percent to 108.55 rupees in Mumbai. NTPC Ltd., India’s largest generator that supplies power to Delhi, increased 2.6 percent to 150.40 rupees.