Shares of power utility firms Tata Power (up 2.62% to Rs 98) and Reliance Infrastructure (up 2.41% to Rs 547.10), edged higher.

The BSE Sensex was up 86.86 points or 0.51% at 16,993.44.

Tata Power had outperformed the market over the past one month until 26 June 2012, rising 7.12% compared with the Sensex's 4.25% rise. The scrip had also outperformed the market in past one quarter, falling 0.31% as against 0.86% fall in the Sensex.

Reliance Infrastructure had outperformed the market over the past one month until 26 June 2012, rising 15.37% compared with the Sensex's 4.25% rise. The scrip had, however, underperformed the market in past one quarter, falling 8.32% as against 0.86% fall in the Sensex.

According to reports, tariff for domestic consumption has been hiked by 24%, while commercial power tariff will be higher by 19.5%. Industries will have to pay 20.2% more for power. Power distribution companies have also been allowed to pass on the cost of rising fuel to the consumers. The increased tariff will be effective from 1 July 2012.

Report suggests that Delhi business accounts for nearly 8% of consolidated net profit for Tata Power, while for Reliance Infrastructure it accounts for a little less than 5%.

This is the fourth tariff hike by Delhi Electricity Regulatory Commission (DERC) in the last one year. DERC has also allowed additional surcharge to reduce the huge deficit. For 2012-13, the surcharge rate has been fixed at 8%, making the effective hike to over 30%. This surcharge will help the distribution companies recover the losses they have incurred in the past.