Mahavitaran gets go-ahead for buying power

The Appellate Tribunal for Electricity (ATE)'s recent order allowing state-owned power distribution company, Mahavitaran, to invite bids for purchasing 4,000 Mw of power under long-term contracts has given impetus to power generation projects of various private players in the state.

In 2005, due to acute shortage of power, the state government had signed MoUs with various private players, who wanted to invest in power generation projects. The combined capacity of these projects was around 12,000 Mw and included those of companies like TPC, REL, Jindals, and Essar.

However, apart from reasons like non-availability of land, environmental clearances, fuel linkages, these projects could not take off as they didn't have any power purchase agreement (PPA) with Mahavitaran, either for the entire or partial capacity of their proposed plants.

As a result, the companies could not achieve financial closure for their projects too.

In December 2006, Mahavitaran had sought the approval of the Maharashtra Electricity Regulatory Commission (MERC) to initiate the process of inviting bids for purchasing 4,000 Mw of power.

This was based on the projections of the Central Electricity Authority (CEA)'s electric power survey.

However, consumer groups contested Mahavitran's claim. Following this, MERC allowed Mahavitaran to invite bids for only 2,000 Mw and asked it to form a committee of independent experts to decide if the additional 2,000 Mw of power was required.

Mahavitaran challenged the MERC's order before the ATE, who ruled in favour of the former.