While admitting the writ petition filed by the TPC division bench comprising Justice B N Agarwal and G S Singhvi stayed the order issued by the ATE till the further hearing, which had declared power purchase agreement (PPA) between TPC and Brihanmumbai Electric Supply and Transport (BEST) null and void. But supreme court made it clear that, MERC can process the application given by REL for allocation of the power.
Last week while overruling the state power regulator ATE had observed, MERC had powers to regulate the quantity of the energy that may be supplied by generation company to distribution licensee when both are under jurisdiction of the same power regulator.
While approving the Annual Revenue Requirement (ARR) for all three utilities for financial year 2007-08, MERC allocated 762 MW of power to REL which supplies power in the suburb of Mumbai from TPC's generation capacity of 1777 MW, 647 MW to BEST which supplies power to island city and 477 MW to TPC's own bulk supply operations. The TPC supplies power directly to key installations like railway, water works, airport, municipal hospitals etc.
However dispute broke after subsequently TPC and BEST signed the PPA for 800 MW, this was challenged by the REL before the MERC.
However MERC accepting the plea by TPC and BEST that, MERC doesn't have powers to intervene in the commercial transaction between two companies rejected the REL's plea in November last year.
The REL subsequently challenged the MERC's ruling before the ATE which today set aside the judgement given by the state power regulator and directed the MERC to consider REL's claim over the TPC's power.
The TPC's generation capacity is 1777 MW and REL's is 500 MW and there is shortfall of around 200 to 300 MW between city's generation capacity and demand which is fulfilled by drawing excess power from state grid.
However during this demand shots up by another 200 to 300 MW and state power utility Mahavitaran has firmly refused to allow further overdrawl of power as state's many parts are reeling under the power cut of 12 to 16 hours.
Then question aroused who shall foot the bill for extra power which is available between Rs10 to Rs 12.50 per unit, BEST or REL and keep city power cut free.
By having PPA for 800 MW, BEST had taken care of its customers but REL whose share in the TPC's generation was already depleted by the 153 MW due to MERC's order was facing the challenge to procure another 250 to 300 MW for its customers.
