Be practical, cooperate: Maha govt to Tata on Mumbai power standoff

The Maharashtra government on Friday asked Tata Power not to precipitate matters but cooperate by continuing supply of power to Reliance Infrastructure (R-Infra) in the larger interest of Mumbai electricity consumers. While saying so, it sent a strong signal that it had legal powers it had yet to use, under the Electricity Act, 2003.

The government reiterated that Tata Power should continue to supply 360 Mw to R-Infra till June and thereafter 200 Mw from July till March next year, at the regulated price of Rs 3.70-4.40 per unit and not at the market rate, which is much higher.

The government made these points today in a formal reply to Tata Power’s letter, in which the company had rejected the government’s decision and said it was making alternative arrangements to supply an extra 160 Mw for its own consumers till June 30. Tata had said supplying R-Infra would mean dishonouring its power purchase agreements with its sister firm, Tata Power Distribution Company, and BEST, the city municipality.

State energy secretary Subrat Ratho, who sent the government communication to Tata over this evening, told Business Standard, “The state government is trying to find an amicable solution during a peculiar time. The government has asked Tata Power not to precipitate the situation but help the consumers, especially when the state government has advised the Maharashtra Electricity Regulatory Commission to look into the matter. MERC is currently seized of the matter. We will always welcome Tata Power to come up with suggestions so that power supply to Mumbai consumers remain unhindered.”

And, on Friday, R-Infra Infrastructure rejected Tata Power’s proposal to supply 200 Mw at Rs 5.90 till June. Instead, the company told its rival to obey the government order. Tata had already declared that it was free to sell 200 Mw to customers other than R-Infra from Sunday midnight if the latter rejected its offer.

R-Infra CEO Lalit Jalan said, “We have turned down Tata Power’s proposal of supply of 200 Mw at Rs 5.90 per unit till June. It clearly vindicates our stand that Tata Power wants to make money at the cost of Mumbai consumers. This is despite the state chief minister Ashok Chavan’s assurance in the legislature and the recommendations of the state government committee that Mumbai power be supplied in Mumbai and Tata Power should continue supply of power at the regulated rate.”

Said a Mumbai-based power analyst: “We have to wait and watch to see how government acts. The state government has powers under sections 11, 37 and 108 under the Electricity Act, 2003. Under Section 11, it can ask Tata to generate to its fullest extent and sell power within the state.

Under Section 37, it can direct the state load dispatch centre to ensure smooth power supply. And, Section 108 allows it to direct the Maharashtra Electricity Regulatory Commission to exercise regulatory powers or bring the disputed parties together to find a workable solution.”