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Home News Power Sector News Cherry Picking - Best to approach Supreme court against Tata Power

Cherry Picking - Best to approach Supreme court against Tata Power

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BESTThe battle to grab high-end consumers in Mumbai has escalated as government-owned Brihanmumbai Electric Supply & Transport Undertaking (BEST) now plans to approach the Supreme Court to inhibit Tata PowerBSE 0.16 % from cherry-picking valued customers in Mumbai. BEST, which charges the highest tariff in the city, had earlier approached the state and the central power regulators. It plans to increase rates by 14% to 16% from April. The company buys the bulk of its power requirement of close to 932.5 MW from Tata Power despite their rivalry.

"We have requested APTEL to maintain the stay that they have issued in this matter as we now plan to approach the Supreme Court on this issue," said BEST's spokesperson. Tata Power did not respond to ET's queries Aptel had ordered in September this year that Tata Power should be restricted in terms of network expansion and supply of electricity to certain categories of customers in Mumbai. The order had also imposed an interim stay on a previous order issued by the Maharashtra Electricity Regulatory Commission (MERC), which had lifted such restrictions.

On August 14, the MERC had issued a distribution license to Tata Power expanding its network of operations to include Mumbai, which was previously only served by BEST. It had also revoked all earlier directions issued by the commission restricting Tata Power's network expansion and supply to identified categories, consumers or areas.

Sources said that already a section of high-end BEST consumers are keen to migrate to Tata Power in order to avail of cheaper power tariffs, and certain commercial entities operating in the island city have already applied to TPC for load consumption of nearly 45 MW. "This kind of migration is not good for BEST at all and could really impact it financially. Another concern is that this switching of high-end customers will have serious implications on the tariff for low end residential consumers, because essentially if high-end consumers moved to Tata Power, it would affect the cross-subsidy for low-end residential consumers of BEST, resulting in an increase in tariff," said an industry executive.

Earlier BEST had warned that it will have no choice but to hike electricity tariffs, as well as bus fares if Tata Power is allowed to enter the city, that stretches The battle to grab high-end consumers in Mumbai has escalated as government-owned Brihanmumbai Electric Supply & Transport Undertaking (BEST) now plans to approach the Supreme Court to inhibit Tata PowerBSE 0.16 % from cherry-picking valued customers in Mumbai. BEST, which charges the highest tariff in the city, had earlier approached the state and the central power regulators. It plans to increase rates by 14% to 16% from April. The company buys the bulk of its power requirement of close to 932.5 MW from Tata Power despite their rivalry.

"We have requested APTEL to maintain the stay that they have issued in this matter as we now plan to approach the Supreme Court on this issue," said BEST's spokesperson. Tata Power did not respond to ET's queries Aptel had ordered in September this year that Tata Power should be restricted in terms of network expansion and supply of electricity to certain categories of customers in Mumbai. The order had also imposed an interim stay on a previous order issued by the Maharashtra Electricity Regulatory Commission (MERC), which had lifted such restrictions.

On August 14, the MERC had issued a distribution license to Tata Power expanding its network of operations to include Mumbai, which was previously only served by BEST. It had also revoked all earlier directions issued by the commission restricting Tata Power's network expansion and supply to identified categories, consumers or areas.

Sources said that already a section of high-end BEST consumers are keen to migrate to Tata Power in order to avail of cheaper power tariffs, and certain commercial entities operating in the island city have already applied to TPC for load consumption of nearly 45 MW. "This kind of migration is not good for BEST at all and could really impact it financially. Another concern is that this switching of high-end customers will have serious implications on the tariff for low end residential consumers, because essentially if high-end consumers moved to Tata Power, it would affect the cross-subsidy for low-end residential consumers of BEST, resulting in an increase in tariff," said an industry executive.

Earlier BEST had warned that it will have no choice but to hike electricity tariffs, as well as bus fares if Tata Power is allowed to enter the city, that stretches from Colaba to Mahim. The company said that if Tata Power is allowed to come in, it needs to restructure its finances especially as it was cross-subsidising its transport wing with the profits it makes in the power business.

Currently, the BEST charges its low-end consumers in the city, who consume less than 300 units a month, Rs 3.36 per unit, while highend consumers like factories and corporate offices are charged Rs 9.99 per unit. The average BEST billing rate of Rs 10.93 per unit is almost 40% higher than that of the TPC rate of Rs 7.10 per unit. from Colaba to Mahim. The company said that if Tata Power is allowed to come in, it needs to restructure its finances especially as it was cross-subsidising its transport wing with the profits it makes in the power business.

Currently, the BEST charges its low-end consumers in the city, who consume less than 300 units a month, Rs 3.36 per unit, while highend consumers like factories and corporate offices are charged Rs 9.99 per unit. The average BEST billing rate of Rs 10.93 per unit is almost 40% higher than that of the TPC rate of Rs 7.10 per unit.

Source- ET

 

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