The MERC on Thursday ruled out extending Reliance Infrastructure's (RInfra) power distribution license in the suburbs for the next 25 years. The regulatory body, however, indicated that RInfra should apply for a license separately and compete with the other aspiring distribution companies in the fray. RInfra, whose distribution license ends on August 15, 2011, may legally challenge the MERC's decision.
"Competition among distributors to win the license is mandated under Electricity Act of 2003. Only competition can bring down the power bills of consumers and end shortage of cheaper power," said the energy department official.
RInfra will now have to fight it out with the state's power distribution arm, Maharashtra State Electricity Distribution Company Ltd , Tata Power Company, Torrent Power Limited, Lanco Infrastructure Limited and Indiabulls Power Limited, who have already made a bid for the license. "Only competition can bring down the power bills of consumers and end shortage of cheap power," said the energy department official. Disposing of the RInfra petition for extension of license, the MERC order said "The Commission is of the view that all applicants for grant of license, irrespective of whether they are deemed licensees or not, will need to comply with Section 15 of the Electricity Act 2003, read with the requirements laid down under the MERC ( General Conditions of Distribution License) Regulations, 2006 for applying for grant of distribution license. This would be consistent with the provisions of the Electricity Act, 2003. For these reasons, RInfra petition can't be treated as an application made for grant of license under Section 14 of the Electricity Act, 2003."
RInfra had filed the petition for seeking extension/renewal of Distribution License for its Mumbai License Area for 25 years. The original application was filed by RInfra on 1 November 2010 and was amended and submitted on 4 March 2011. The two main pleas were - extension to the license for 25 years with effect from 10 June 2003 or alternatively, with effect from 16 August 2011.
RInfra shall initiate"appropriate" steps. This indicates that it might legally challange the MERC decision.
Source- Times of India