 "Mumbai power consumers may get a new supplier")
Electricity consumers in Mumbai and its suburbs can expect a new power supplier at a competitive rate. The Maharashtra Electricity Regulatory Commission (MERC) has invited an expression of interest (EoI) in the city and part of the suburban area currently serviced by Tata Power's distribution arm.
The EOI has been floated as Tata Power Distribution's licence is valid till August 15 this year. Bidders would have to submit their bids in response to the EOI by January 31.
However, the bidder would have to submit a comprehensive plan to lay the distribution network or till that time, use the existing network of Tata Power and Reliance Infrastructure to supply power. MERC would take a final call in this regard.
A former regulator, who did not want to be identified, said power companies could submit their bid on their own or in a joint venture.
“However, the key issue is whether the bidder is ready to bear the cost of supply of power by using the existing networks or is in a position to implement in a time-bound manner, its own distribution network. In 2011, MERC had received bids from Lanco, Indiabulls, Torrent Power, Maharashtra State Electricity Distribution Company and Reliance Infra for distribution licence in Reliance Infrastructure distribution's area. However, MERC ultimately granted the licence to Reliance Infrastructure for next 25 years.”
Ashok Pendse, consumer representative at MERC said consumers could expect a new supplier. However, he told Business Standard: “Attorney General Goolam Vahanvati, in his recent comments, had quoted the provisions of the Electricity Act, 2003 whereby the distribution company should distribute electricity through its own network. It is a crucial question. However, the case of Reliance Infrastructure, Tata Power in Mumbai are an aberration to the law.”
Power analyst D Radhakrishna hoped that there would be competition in Mumbai's electricity sector. “The best will come after the amendments to the Electricity Act, 2003, wherein content and carrier businesses will be separated.”
The EOI has been floated as Tata Power Distribution's licence is valid till August 15 this year. Bidders would have to submit their bids in response to the EOI by January 31.
However, the bidder would have to submit a comprehensive plan to lay the distribution network or till that time, use the existing network of Tata Power and Reliance Infrastructure to supply power. MERC would take a final call in this regard.
More From This Section
At present, Tata Power, Reliance Infrastructure, BEST and MahaVitaran distribute power in the city and suburbs. Mumbai's daily demand is 3,000 Mw. Tata Power Distribution has 41 million consumers in its area of operation of about 475 sq km. About 87 per cent of the total consumer base is residential, another 10.67 per cent is commercial and 1.82 per cent are industrial consumers. The energy input to the distribution system during 2012-13 had been over 6,650 million units. The distribution loss was reported at 1.1 per cent during the same fiscal, MERC said in its EoI.
A former regulator, who did not want to be identified, said power companies could submit their bid on their own or in a joint venture.
“However, the key issue is whether the bidder is ready to bear the cost of supply of power by using the existing networks or is in a position to implement in a time-bound manner, its own distribution network. In 2011, MERC had received bids from Lanco, Indiabulls, Torrent Power, Maharashtra State Electricity Distribution Company and Reliance Infra for distribution licence in Reliance Infrastructure distribution's area. However, MERC ultimately granted the licence to Reliance Infrastructure for next 25 years.”
Ashok Pendse, consumer representative at MERC said consumers could expect a new supplier. However, he told Business Standard: “Attorney General Goolam Vahanvati, in his recent comments, had quoted the provisions of the Electricity Act, 2003 whereby the distribution company should distribute electricity through its own network. It is a crucial question. However, the case of Reliance Infrastructure, Tata Power in Mumbai are an aberration to the law.”
Power analyst D Radhakrishna hoped that there would be competition in Mumbai's electricity sector. “The best will come after the amendments to the Electricity Act, 2003, wherein content and carrier businesses will be separated.”