Tata Power, Reliance Energy standby fee hearing on Tuesday

The hearing of the case between Tata Power Co Ltd and Reliance Energy over standby charges has been adjourned to Tuesday. Meanwhile, Reliance Energy's special leave petition in the Supreme Court against Tata Power will come up for hearing on October 11.

Reliance Energy has approached the Supreme Court seeking "hard cash" from Tata Power instead of a bank guarantee. After May 31 order of the Maharashtra Electricity Regulatory Commission (MERC), Tata Power was supposed to refund Rs 322 crore as standby charges to Reliance Energy. These charges pertained to the period from 1998-99 to 2003-04.

For this amount (Rs 322 crore), Tata Power has extended a bank guarantee and simultaneously contested the MERC order in the Bombay High Court.

Reliance Energy's special leave petition is scheduled for hearing on September 27.

The division bench, comprising Bombay High Court chief justice D S Bhandari and justice D Y Chandrachud, on September 16 gave a week's time to both the companies to settle the dispute out-of-court.

However, talks between both the parties remained inconclusive.

On Thursday, counsel for Tata Power, Iqbal Chagla asked for quashing of the MERC order on grounds that the body has contradicted its own stand on the standby charges issue.

Chagla also alleged that the Central Electricity Authority (CEA) on whose order MERC passed May order also went beyond its brief.

Tata Power wants Reliance Energy to share 50 per cent burden of standby charges. These charges are paid by Tata Power to Maharashtra State Electricity Board against ensuring a back-up power supply for Mumbai. Reliance Energy, in turn, gets back-up support from Tata Power.

Tata Power gets standby facility of 550 mega volts ampere (MVA) from MSEB, of which, 275 MVA is used by Reliance Energy, formerly BSES Ltd.

Chagla submitted to the court that between 1998-04, Tata Power has used the standby facility on nine occasions while Reliance Energy used it 54 times.

In the next hearing on Tuesday, Reliance Energy and the CEA will present their views, Mahendra I Sethna, counsel for CEA said.