TPC plea for billing system exemption rejected

Maharashtra Electricity Regulatory Commission (MERC) has rejected the Tata Power Company (TPC) plea to exempt it from the weighted average rate system (WARS) of billing for drawing power from the state grid.

It pays Rs 396 crore to the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) as stand-by charges to ensure Mumbai gets uninterrupted power.

Instead, it should be charged at a fixed rate of Rs 2.99 per kilo watt hour (Kwh) or any other fixed rate determined by the commission.

Because of today's order, the TPC will have to pay around Rs 50-60 crore to MSEDCL for drawing power from October to March this year, claimed sources in MSEDCL.

It may be recalled that MSEDCL had written a letter to the power regulator, earlier this month and asked MERC to direct TPC to pay its dues.

However, the commission ruled that the stand-by arrangement is a contract on the capacity of power and not for quantum of power, so the rates for power drawn from the state grid shall be determined separately on the basis of WARS.

Commission has further observed in its order that MSEDCL is procuring power at a high cost to meet its own requirement and it cannot be expected that it will supply low-cost power to Mumbai while it consumes the high cost power.

The commission has further clarified that the net exchange of power between power utilities in 30 minute blocks will be applicable while calculating the energy charges one utility has to pay another.

For instance, if during the time block of 12 pm and 12.30 pm TPC draws power from the state grid then for this period the TPC will have to pay at the weighted average rate at which MSEDCL buys power. Typically, the cost of power is high during the day and low in the evenings or early mornings."

However, the commission has also come down heavily on MSEDCL and the state load dispatch centre (SLDC). It has directed SLDC to maintain a correct data of overdrawal of power by each licensee in Mumbai license area i.e. TPC, Reliance Energy Ltd and BEST.

It has reminded MSEDCL that the practice of MSEDCL to send the energy bill to TPC on behalf of all other licensees in Mumbai goes against power regulator's earlier orders.

The necessary operating structure for transfer of funds may be developed and adopted by all licensees through the Grid Co-ordination Committee.