Maha govt to use legal powers to force solution to Tata, R-Infra power war

The Maharashtra government has decided to play the role of a heavy-handed mediator in the tussle between Tata Power and Reliance Infrastructure. The dispute is over the sale of electricity in this city at regulated rates.

The government plans to invoke Section 108 of the Electricity Act, 2003, under which it can issue a directive to the Maharashtra Electricity Regulatory Commission (MERC) to issue a regulatory order or to bring both companies to the table for a solution to the dispute, which threatens to snowball into a major crisis for Mumbai’s power consumers.

Tata Power has told the state government it cannot continue its supply of 500 Mw electricity to Reliance Infrastructure (R-Infra) at discounted rates because its own customer base is growing rapidly. R-Infra says such a move would force it to buy electricity at market rates and so, increase what it charges customers.

A senior government official said the government is quite clear that the interest of Mumbai’s electricity consumers should be protected and the power generators or licensee would have to supply power within Mumbai. A committee chaired by the chief secretary had given a report on the issue, which has discussed the measures needed to sort the dispute, he said. A cabinet committee chaired by the chief minister is expected to take a decision in this regard.

“If a generator in the Mumbai licensed area has excess power, it needs to be sold to another licensee which doesn’t have enough electricity. In such a scenario, Tata Power, which has already succeeded in attracting 30,000 consumers of Reliance Infrastructure, will have to supply 200 Mw power to the latter at the regulated price of Rs 4.40 per unit,” the official said. He added that Tata Power would be asked not to allot the excess power of 200 Mw, which it has yet to commit to other buyers, for power trading.

Currently, Tata Power generates 1,877 Mw. R-Infra has an installed capacity of 500 Mw, procures 500 Mw from Tata Power and 300-500 Mw from the open market.

Tata Power sources said “We understand that the cabinet sub-committee is meeting tomorrow and we await their final decision.” The company declined further comment. R-Infra reiterated that it was prepared to sign a power purchase agreement with Tata Power for the proposed 200 Mw.

State government officials said the government had also rapped Reliance Infrastructure for not taking adequate steps to add capacity. They said the company would be told to step up efforts to do so, failing which it would face heavy penalties.