Reliance Energy Ltd (REL) and Tata Power Company (TPC) filed their Annual Revenue Requirement (ARR) and Tariff Revision applications for 2006-07 in February 2006. REL asked for a tariff increase of about 300 Cr and TPC asked for a tariff increase of about 600 Cr. This translated to a tariff hike of about 30% for Mumbai consumers. MERC held two technical validation sessions on this issue for identifying critical data gaps in the ARR application on 5th April and 17th April 2006. Prayas actively participated in both sessions and pointed out many data inconsistencies and requested some additional data to facilitate further analysis of ARRs. As directed by MERC, most of the data asked by Prayas was made public. Public hearings on these ARRs took place on 12th June 2006 at Mumbai. Following are Prayas’s comments made during the ARR and Tariff Revision process for REL and TPC for FY 2006-07. These comments mainly deal with the important techno-economic issues and some gaps and inconsistencies in the ARR application.