MERC stated ward-wise cherry picking by Tata Power Company was evident, especially for single consumers from categories other than residential. "Though there are changeover consumers in the surrounding areas, Tata Power Company has laid its network only for single consumers without laying one for remaining changeover consumers in the surrounding area. Hence, appropriate directions need to be given to Tata Power Company to ensure it is unable to indulge in such cherry picking under the switchover process," it stated.
A Reliance Infrastructure spokesman said, "It is a victory of low-end residential consumers of suburban Mumbai. Owing to inadequate cross subsidy, high-end consumers who cross-subsidise low-end residential consumers, were migrating. This would have adversely affected the rates of low-end consumers. On Wednesday's order puts an end to the cherry picking."
A Tata Power Company spokesperson said, "MERC has allowed changeovers in Mumbai for a particular set of customers, which is key to creating competition in the larger interest of customers. However, we understand few categories of customers are being prevented from changeovers, which is also in the competitive spirit, though we can always acquire them as part of our licence. MERC has maintained our right to switch consumers to our wires. It has also suggested a parallel network in 11 clusters for direct customers, which is a positive development. Tata Power is studying the order and would always be happy to serve customers with fairness and transparency."
MERC also directed Tata Power Company to immediately amend its power supply application form, bring it in line with the MERC Supply Code regulations, and do away with the mandatory requirements of providing PAN/TAN card numbers, as well as mobile numbers. MERC said it would also monitor the progress in consumer addition by Tata Power Company (changeover, switchover, new connections and reverse migration, if any) on a quarterly basis and the company, along with Reliance Infrastructure, would have to submit the information for every quarter within a month of the quarter-end.
MERC stated in the first phase, Tata Power Company should not roll out its distribution network in the clusters/wards in which there were negligible or very few residential consumers.
In its interim petition filed in October 2011, Reliance Infrastructure had urged Tata Power Company be restrained from adding to its network any new consumer in Reliance Infrastructure's areas of supply, or existing consumers connected to its network, till Tata Power complied with its universal service obligation by laying its network with Reliance Infrastructure's licensed area of supply.
It said till date, its network was spread over 384 sq km and catered to 2.8 million consumers. The network was augmented to that necessary for 1,00,000 additional consumers a year. Of the 2.8 million consumers, about 2,21,664 had migrated to Tata Power. However, Reliance Infrastructure said the migration was skewed towards majority subsidising sales (90 per cent), rather than subsidised sales (10 per cent). As a result, after migration, cross subsidising sales of Reliance Infrastructure had fallen to 41 per cent, while subsidised sales rose to 59 per cent.
Source- Business Standard