Tata Power allowed to distribute electricity in south Mumbai

There is good news for electricity consumers from the south of Mumbai as they will now get to choose their power supplier. Instead of simply relying on the BrihanMumbai Electric Supply and Transport (BEST), an arm of the local civic authority BrihanMumbai Municipal Corporation, for power supply, they can now approach Tata Power.

The Appellate Tribunal of Electricity (ATE) has ruled that BEST’s status as a local authority cannot in any way hinder the consumers’ right to choose their power supplier. BEST had filed a petition against the Maharashtra Electricity Regulatory Commission’s (MERC) order allowing Tata Power to supply power in south Mumbai by laying its own electricity distribution network.

MERC in its order dated February 22, 2010, had directed Tata Power to supply power in the BEST area by laying its own distribution network for discharging its obligation under section 43 of the Electricity Act to supply electricity to all consumers.

Currently, BEST supplies power to one million consumers in the island city. Recently, MERC had given its approval to BEST for recovering a two-year revenue gap of Rs 443.58 crore. This is expected to raise BEST’s power tariff by around 35 paise. BEST’s average tariff comes to Rs 6 per unit.

By the end of 2011, Tata Power’s customer base stood at 250,000. Its power generation capacity for Mumbai is around 1,800 megawatts. The average tariff for power stands at Rs 5.80 per unit.

Moreover, Reliance Infrastructure caters to around 2.7 million consumers in Mumbai’s suburbs and surrounding areas like Mira Road and Bhayender and its average tariff is around Rs 6.8 per unit.

Experts believe consumers may switch from BEST to Tata Power in view of the cheap power tariff.

ATE's order has given a boost to Tata Power, which has been delcared as a retail distribution licensee by the Supreme Court in its recent ruling for areas served by BEST and Reliance Infrastructure.