Tata Power seeks local supply licence

Tata Power, has applied for a licence to distribute electricity directly to consumers in six cities and industrial hubs in Maharashtra.

The company's application filed before the Maharashtra Electricity Regulatory Commission (MERC) has requested permission to distribute power in Navi Mumbai, Pune, Bhandup, Vashi, Lonavala and Khopoli circles in the state.

Tata Power's main rival in the private sector, Reliance Energy, has already filed for permission to supply electricity in six circles in Maharashtra. Both companies have asked for permission to distribute power in Pune and Navi Mumbai.

In November, Reliance Energy also applied for permission to supply power to south Mumbai, Nagpur, Aurangabad and Nasik circles in Maharashtra and some circles in Gujarat. The application is still pending before the MERC.

Tata Power's application to supply power directly to consumers in these areas is the first step in its nationwide distribution plans, a company executive said.

However, the applications from both Tata Power and Reliance Energy could face a stumbling block because of uncertainties about the interpretation of Section 14 of the Electricity Act 2003, which deals with second distribution licences.

The government has also indicated that it is against private companies like Tata Power and Reliance Energy 'cherrypicking' affluent urban agglomerations for supplying power.

It is planning to come out strongly against 'cherrypicking' in its proposed guidelines for grant of parallel distribution licenses.

In Maharashtra, Tata Power's key area of activity is supplying power to high-end consumers like the railways, the Mumbai Port Trust and several other large commercial and industrial consumers who buy more than 1,000 KvA each.

The move by the two private power utilities in the Maharashtra is expected to intensify competition for the state-owned Maharashtra State Electricity Board (MSEB).

Except Mumbai, MSEB is at present the sole supplier of power to consumers in Maharashtra, including Navi Mumbai, Pune, Bhandup, Vashi, Lonavala and Khopoli circles for which Tata Power has applied for a licence.

Electricity distribution

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• Tata has requested permission to distribute power in Navi Mumbai, Pune, Bhandup, Vashi, Lonavala and Khopoli circles in the state
• In Maharashtra, Tata Power's key area of activity is supplying power to high-end consumers
• The entry of Tata Power and Reliance Energy is expected to intensify competition for the state-owned Maharashtra State Electricity Board