Tata Power barred from cherrypicking R Infra consumers in Greater Mumbai

ATE upholds MERC's order in this regard

Tata Power has been barred from indulging in cherrypicking consumers of Reliance Infrastructure (distribution) under the switch over process in Greater Mumbai. In a landmark order, the Appellate Tribunal on Electricity (ATE) has rejected Tata Power’s petition challenging Maharashtra Electricity Regulatory Commission's (MERC) order in this regard.  ATE has also ruled that the change over consumers are liable to pay cross subsidy surcharge to R Infra for using its network.

ATE in its order said “ The State Commission is required to look after not only the interest of the consumers but also the interest of licensees. Therefore, the State Commission, while deciding that the change over consumers are liable to pay cross subsidy surcharge to RInfra for using their network has in fact taken into consideration the interest of the consumers as well as the interest of the licensees. Therefore, findings and directions given in the impugned order by the State Commission which would promote healthy competition are perfectly justified.”

As reported by Business Standard, MERC in its order delivered in August had said that a ward-wise cherry picking by Tata Power Company was evident, especially for single consumers from categories other than residential. MERC had observed that though there are changeover consumers in the surrounding areas, Tata Power  has laid its network only for single consumers without laying one for remaining changeover consumers in the surrounding area.

MERC had also directed Tata Power Company to conduct switchovers only for those who consumed up to 300 units of electricity a month. However, MERC clarified the restriction was limited to residential consumers till a year from when the order was passed, and it would review the status of the switch over and new connections added in the identified areas during this period before deciding on its strategy for the next year.

Tata Power spokesman told Business Standard "The Company is currently studying the order and will be able to comment on the same in due course of time." The Reliance Infra spokesman said, "We are happy that Hon'ble ARE agreed with us that Tata Power is laying network selectively and cherry picking high end consumers. ATE order will protect the interest of 2.3 low end subsidised consumers and will save them from huge tariff shock."

ATE’s order is expected to promote competition in the Mumbai’s fast changing power sector. The order has come as a big relief to R Infra’s 2.3 million consumers who are spared from additional tariff burden. As high as 90% of Tata Power’s sale is done to high end cross subsidising consumers, which include Railways, Refineries, large housing and commercial complexes, multiplexes. On the other hand, only 10% sale of power is made to low end consumers coming from the upper middle classes.