Reliance Infratsructure issued distribution licence for Mumbai suburbs

• LICENSE IS TO SUPPLY ELECTRICITY IN AND AROUND SUBURBS OF MUMBAI
• LICENSE EXPANDS THE EXISTING AREAS OF DISTRIBUTION TO INCLUDE CHENE AND VARSOVA AREAS FALLING UNDER THE MIRABHAYANDAR MUNICIPAL CORPORATION
• LICENSE IS FOR A PERIOD OF 25 YEARS EFFECTIVE FROM AUGUST 16, 2011 UP TO AUGUST 15, 2036
• MERC SATISFIED WITH THE POWER PROCUREMENT PLAN AND MANAGEMENT AND TECHNICAL EXPERTISE OF RINFRA
• MERC SATISFIED THAT RINFRA FULFILS THE ELIGIBILITY CRITERIA RELATING TO CAPITAL ADEQUACY, CREDIT WORTHINESS AND CODE OF CONDUCT AS SPECIFIED IN GOVT OF INDIA RULES

Reliance Infrastructure Limited (RInfra) has been granted a licenses by the Maharashtra Electricity Regulatory Commission (MERC) for Distribution of electricity in and around suburbs of Mumbai. The Licenses shall be valid for a period of 25 years effective from August 16, 2011 up to August 15, 2036.

In the new Distribution License, MERC has also expanded the existing area of distribution to include Chene and Varsova areas falling under the Mira Bhayandar Municipal Corporation.

The MERC, in its order dated 11th August 2011 has expressed its satisfaction on the compliances of criteria by Reliance Infrastructure as stipulated under the Act.

• Capital Adequacy requirement - Since RInfra has passed both the tests for Networth & Internal Resource Generation, the criteria is met.
• Creditworthiness requirement - Based on the credit rating reports and solvency certificate, the criteria is met.
• Code of Conduct requirement - Based on the information submitted under affidavit by RInfra, there is no violation of Code of Conduct.

In addition to the above, RInfra also meet with the criteria on minimum area of supply requirement and owning the distribution system.

• Minimum area of supply requirement - With the inclusion of two revenue villages, Chene and Versova, which fall within MBMC limit, this requirement, is fulfilled.
• Requirement of own network roll out plan - Since RInfra is an existing licensee in the proposed area of supply hence roll out would be only in the additional small area covered by two new villages being added in the license area

In addition to the above eligibility criterion, MERC also assessed RInfra's application on the following aspects:

• Power Procurement - RInfra's plan for power procurement is reasonably balanced to satisfy the need of the proposed area of supply.
• Management & Technical expertise - RInfra possesses sufficient management and technical experience to handle the business of electricity distribution.

MERC, the regulator, issued the distribution license to RInfra under the Electricity Act 2003. The license was issued after the public hearing held on July 9, 2011. The public hearing witnessed overwhelming number of consumers supporting RInfra on efficiency, services and network performance.

RInfra has been distributing electricity to consumers in and around suburbs of Mumbai since 1929 and at present serving 2.8 million consumers with the highest network reliability of 99.98% and one of the lowest system losses of around 10%.