South Mumbai power supply: SC nod for Tata Power to lay network

BEST's resistance to consumers' willingness to switchover to Tata Power was earlier rejected by both MERC and ATE before BEST moved the SC

The Supreme Court on Thursday dismissed an appeal filed by Brihanmumbai Electric Supply and Transport (BEST), which sought to restrain Tata Power from laying its network to supply power in BEST's area in South Mumbai.

The apex court ruled there was no provision in the statute according BEST a privileged position of being the sole distribution licensee in the area. This comes as a relief for consumers in South Mumbai - between Colaba and Sion - as they will now get to choose their power supplier. Instead of simply relying on BEST, an arm of Mumbai's local civic authority, Brihanmumbai Municipal Corporation, for power supply, they can now approach Tata Power.

The court rejected BEST's contention that if a local authority was a distribution licensee in a particular area, there could not be any other licensee in that area, without permission of the local authority. "Such a contention would negate the effect of universal supply obligation under Section 43 of the (Electricity) Act," the court said in its judgment.

Tata Power said it welcomed the court's ruling, as consumers in the South Mumbai area could now choose their service provider for electricity. "This ruling will foster competition and also pave the way for customers to avail competitive tariffs and better customer service," the company said.

The dispute began in 2009 when multiple consumers in BEST's supply area expressed willingness to switch to Tata Power. BEST's opposition to the move was rejected by both Maharashtra Electricity Regulatory Commission (MERC) in 2010 and the Appellate Tribunal for Electricity (ATE) in 2012, before BEST moved the Supreme Court.

BEST resisted the consumers' demand by arguing MERC did not have the jurisdiction to adjudicate upon a dispute between the consumer and distribution licensee. Tata Power is not a deemed licensee in that area and Tata Power cannot extend its network in BEST's area without its permission.

BEST is currently recovering its transport wing's annual losses to the tune of nearly Rs 750 crore from electricity tariffs through a component called Transport Division Loss Recovery. Tata Power has around 450,000 consumers, of which 65 per cent are connected at a residential load of less than 300 units a month.