|
| Tata, R-Infra confirm deal to end Mumbai power supply standoff |
| Makarand Gadgil / Mumbai May 06, 2009, 00:15 IST |
|
Tata Power Company (TPC) and R-Infra, previously REL, have reached an agreement and decided to sign a Power Purchase Agreement (PPA) for 500 Mw, to be used by the latter to distribute in suburban Mumbai.
The two companies have had many differences over the quantity of power and the duration of the PPA.
The R-Infra spokesman confirmed the development and said details like the rate at which the power would be sold to them by TPC would be decided by the Maharashtra Electricity Regulatory Commission (MERC).
“As you know, the matter is sub judice. R-Infra has agreed to sign the 500 Mw PPA now, which will be executed once an agreement is reached on the terms and conditions of the PPA,” said the statement issued by TPC in response to an email query from Business Standard.
While TPC wanted a commitment from R-Infra for 10 years or longer, the latter wanted to sign the PPA for 760 Mw. TPC was ready to sign a PPA only for 500 Mw. However, neither company is revealing the compromise formula.
The agreement has aroused much curiosity in power industry circles, as both companies are still locked in a legal battle over allocation of TPC’s generation capacity among various players who supply power to Mumbai.
The TPC has generation capacity of 1,777 Mw. It used to sell around 650 Mw to Brihanmumbai Electrical Supply and Transport (BEST), which distributes power in the island city, 760 Mw to R-Infra to distribute power in Mumbai’s suburbs and the rest to bulk consumers like the railways, airport and other utilities and some industrial consumers.
A dispute broke out between TPC and REL in 2007 after R-Infra’s share in the TPC power came down by around 150 Mw and R-Infra had to bridge this gap by buying power from the spot market, where rates can go up to Rs 9 a unit in summers. R-Infra filed a review petition before the power regulator; however, the MERC rejected it, saying it had no jurisdiction over a commercial agreement between two entities.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
