Tata Power offers 200 Mw to R-Infra at higher cost

Tata Power today offered Reliance Infrastructure (R-Infra) 200 Mw at Rs 5.90 per unit, but not at the regulated rate of Rs 4.40 per unit, till June.

Tata Power, which termed R-Infra inefficient, irresponsible and defaulting, said it would be open to sell that excess 200 Mw from Sunday onwards to other buyers in Mumbai or MahaVitaran or the procurers from outside Maharashtra, if R-Infra rejected its proposal. If R-Infra turns down Tata Power’s proposal, then the former would have to source that much of power from the open market at the prevailing rate of Rs 6.50-7 per unit. R-Infra buys 650 Mw from the open market to meet its demand. S Ramakrishnan, executive director at Tata Power, told reporters that the company was awaiting R-Infra’s response to its offer.

Tata Power sent a letter to the State Load Dispatch Centre (SLDC), which organises despatch of power in the state, saying that from Sunday onwards it would supply 160 Mw to Tata Power Distribution Company and 100 Mw to BrihanMumbai Electric Supply and Transport (BEST) as in an earlier power purchase agreement (PPA). For the extra 200 Mw, the company would take a call after it receives reply from R-Infra.

R-Infra CEO Lalit Jalan told Business Standard: “The company is yet to receive the Tata Power’s proposal. However, one thing is quite clear that Tata Power is pursuing profiteering at the expense of Mumbai consumers.”

Earlier, Tata Power rejected the state government’s order on for continuation of supply of 360 Mw to R-Infra up to June and from July to March 2011, supply of 200 Mw at the regulated rate of Rs 4.40 per unit.

The company in its formal response said, “The recommendation compels us to buy power from expensive sources, thereby causing immense hardship to our customers, specially when Tata Power Distribution Company had planned and made the necessary arrangement for this extra load. We welcome the government recommendation that allows us to honour the PPA with BEST for 100 Mw.” However, the company further said with regards to the balance 200 Mw, as offered earlier in its endeavor to help the state government, it was willing to supply to R-Infra till June 30.

Ramakrishnan claimed that the present situation had arisen because R-Infra did not make adequate arrangements to procure power from April 1, despite a more than nine months notice given by Tata Power. He made it clear that the Electricity Act, 2003, made it mandatory for a distribution licencee to sign a PPA. R-Infra had consistently avoided entering into a PPA, despite being specifically asked to do so by the Maharashtra Electricity Regulatory Commission, he alleged.