Tata Power's network roll-out plan options being assessed by regulators

MERC seeks objections from stakeholders; company says consumer choice not to be compromised

Maharashtra Electricity Regulatory Commission (MERC) has sought reactions from the stakeholders of Tata Power’s network roll-out plan for Greater Mumbai.

Tata Power is expected to spend Rs 1,600 crore on the project. So far, it has spent Rs 400 crore. While granting the distribution licence from  August  2014 for 25 years, the regulator had asked the power company  to give a network plan, especially as it was moving to increase its consumer base. At present, it has 600,000  consumers and the company has to use the network of competitor Reliance Infrastructure (RInfra) for supply.  

HANGING IN THE BALANCE

• Tata Power is expected to spend Rs 1,600 crore on the project
• So far, it has spent Rs 400 crore
• At present, the company has 600,000 consumers
• It has to use the network of competitor Reliance Infra for supply

 

The matter went to the Appellate Tribunal for Electricity (APTEL), which said a duplication of the network meant an avoidable increase in the cost. The APTEL stressed on the need to optimise or economise service on the existing network. MERC then formed a four-member committee, seeking its recommendations on the matter. The committee report said if an old building was demolished and new one built, Tata Power could lay the network and supply power. However, if the load had to be increased in an existing building, RInfra, the supplier, could strengthen the network, not Tata Power. RInfra has a consumer base of three million in the city.

A Tata Power spokesperson told this newspaper, “Any investment in network roll-out without customer demand may remain underutilised, which is not in the interest of the consumers. Network should be developed based on consumer demand.”

“The committee has attempted to remove choice of consumers and to reduce distribution companies to investors by recommending institutional mechanisms to micro-manage the distribution companies. It is important that customer choice not be compromised and distribution companies should be free to manage the consumer load in and efficient and economic manner.”

However, the RInfra spokesman said the  four-member committee has given recommendations on the network  roll-out plan of Tata Power based on the principles laid down by the APTEL judgment and interim order of MERC.  “The committee has recommended that any new network to be laid by RInfra and Tata Power would be based on cost economics of both the utilities, thereby, lowering the burden of wheeling charges on the consumers of suburban Mumbai,” he added.