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Home News Power Sector News APTEL upholds Tata Power's distribution licence in Mumbai

APTEL upholds Tata Power's distribution licence in Mumbai

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MumbaiElectricity consumers, especially from South Mumbai, will now be able to choose their power supplier after the Appellate Tribunal for Electricity (APTEL) dismissed BrihanMumbai Electric Supply and Transport (BEST's) appeal challenging Maharashtra Electricity Regulatory Commission (MERC's) licence to Tata Power.

The consumers, currently served by BrihanMumbai Electric Supply and Transport's (BEST), can also expect a competitive power tariff.

MERC had granted a distribution licence to Tata Power up to August 2039. Tata Power was entitled to supply power in BEST areas too, between Colaba/Cuffe Parade and Sion/Mahim areas of Mumbai.

APTEL in its judgement delivered on November 25 said Tata Power had met the conditions for credit worthiness and capital adequacy for the entire area of supply.

It added that the issue of Tata Power supplying electricity to areas currently served by BEST will be considered separately in BEST's appeal pending before it.

A Tata Power spokesperson told Business Standard, "BEST had filed an appeal in APTEL against the order of MERC issuing transmission license and distribution license to the company for the next 25 years with effect from August 16, 2014. This appeal has been dismissed yesterday by APTEL."

BEST officials could not be reached for comments.

BEST, which is an undertaking of the BrihanMumbai Municipal Corporation(BMC) engaged in power supply and transport, in its appeal filed against MERC and Tata Power had argued that MERC should not have granted Tata Power the distribution licence as its previous performance was inadequate.

Besides, BEST said MERC had erred in holding that network roll out can be prescribed as a subsequent specific condition and argued that the same has to be approved before the grant of licence.

BEST during public hearing conducted by MERC had said Tata Power's entry in its area will endanger its existence and over 47,000 employees will be jobless. It had added that it will also lose major high-end consumers, especially industrial and commercial consumers to Tata Power, adversely impacting its finances.

MERC while granting distribution licence to Tata Power in its order on August 14, 2014 had directed Tata Power to submit a network roll out plan in six weeks.

Incidentally, Tata Power has already launched an investment plan of Rs 1,879 crore for a backbone network spread across its entire license area. The company is creating capacity to serve more than 1.4 million consumers by FY 2018-19. Out of 1.4 million potential consumer network capacity, more than 800,000 network capacity would be around the slum dominated areas.

BEST has a consumer base of 1.05 million while Tata Power supplies power to over 5,00,000 customers in its area of operation of about 475 sq km in Mumbai. Reliance Infrastructure is the third major distributor with a consumer base of nearly 2.9 million. The state run Maharashtra State Electricity Distribution Company (MahaVitaran) has little presence in north eastern suburbs of Mulund and Thane.

Source - Business standard


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