Billionaire Gautam Adani’s foray into power distribution has begun with a social media offensive, with the Congress party and some consumers accusing his company of increasing the bill sharply in October. But the company said it’s facing “malicious” propaganda because the regulator had increased tariffs based on a petition filed before it took over the circle and that electricity consumption had risen 18% during the period.
Several Mumbai residents under the Adani Electricity circle – which was earlier controlled by Anil Ambani-led Reliance Infrastructure — have said that there has been a spike in their bills in October. Mumbai’s Congress chief Sanjay Nirupam has accused the company of “looting” consumers, with banners and hoardings across the city alleging a 50% increase in power charges and faulty meter reading.
“There has been an undue perception created around Adani Electricity’s power billing by a senior political party leader through various platforms using irresponsible words like ‘loot’, little realising that this implies to rates which are decided by an independent quasi judicial body MERC, after following the due process of public hearing. The statements that have been made are totally irresponsible, false, incorrect, distorted, carry innuendos and level false and malicious insinuations,” Adani said in a response to ET’s query.
Adani Electricity started billing Mumbai consumers from September, after it completed the acquisition of the Mumbai power distribution business from Reliance Infrastructure and has faced hiccups in the first two billing cycles.
Some Adani consumers witnessed an increase in their bills for September, which the company attributed to its inability to read meters in some areas due to “internal agitation on certain past issues”, with the assurance to pass on the credit after meter reading is done. Two consumers confirmed to ET that they received the credit in the subsequent bills.
But some consumers complained on social media that bills were substantially higher in October. Some said it had doubled from the previous month, but Adani dismissed this as seasonal variations, as consumption traditionally rises in October, which is one of the hottest months of the city due to rising temperature after the monsoon withdraws.
The company attributed the increase to revised regulator-approved tariff and an 18% average increase in consumption in October against September.
ET has seen some consumer bills where the number of units used has doubled on a year-on-year basis in October. One consumer shared his bill where he was charged Rs 29,000 in October as against his usual bill of around Rs 3,500 and upon visiting Adani office he was told it was an “accounting mistake” and the amount was reduced to Rs 4,000.
Electricity distribution is a regulated business in India with prices being determined by the regulator after taking all fixed and variable costs under considerations. In an order dated September 12, MERC approved a revision of tariff for the state’s power distribution companies, the state-run — Brihanmumbai Electric Supply and Transport Undertaking and Maharashtra State Electricity Distribution Co, and private distributors Tata Power Company and Reliance Infrastructure’s energy business, which is now known as Adani Electricity.
Adani Electricity’s said the revised tariff applicable from September has been increased to Rs 4.78 a unit from Rs 4.42 a unit for the first 0-100 units consumed, and to Rs 8.58/ unit from Rs 8.04/unit for the next 101-300 units. The rates for the slabs 301-500 units were increased by 30 paise, while that for over 500 units were increased only marginally.
“The tariff increase has no correlation with Adani taking over Mumbai distribution business. It is only a coincidence that the timing of tariff revision coincided with the takeover,” the company said. Reliance Infrastructure had filed for tariff petition to MERC in December 2017 and while the public hearing for this happened on August 2 this year, the actual order for revision came on September 12, after Adani took over RInfra’s Mumbai electricity business on August 28.
Last year in December, Reliance Infrastructure and Gautam Adani led Adani Transmission had signed a definitive agreement for the former’s power generation and distribution business in Mumbai in a deal valued at Rs 13,251 crore. Reliance Infrastructure will also get regulatory assets under approval estimated at Rs 5,000 crore and net working capital on closing estimated at Rs 550 crore, making the total consideration around Rs 18,800 crore.
