It has also been granted licence to supply electricity in areas of Mira-Bhayander Municipal Corporation, Chene and Versova which were earlier not a part of its licence area.
"Based on all materials placed, and suggestions and objections received, the Commission is of the view that it is in the public interest to grant licence to TPC to distribute electricity in the proposed area of supply," MERC said in the order.
The Commission had invited tenders from interested parties for granting licence to supply electricity in the proposed areas as TPC's licence was expiring on Friday.
The new licence will come into effect from tomorrow, the order said.
"The Commission grants distribution licence to TPC to supply electricity in the proposed area for 25 years from August 16," the order said.
MERC has also asked Tata Power to submit a fresh rollout plan, for supplying electricity, within six weeks.
Currently, BEST is supplying electricity in the city along with Tata.
"With this order, consumers of BEST can shift to Tata Power's network," an industry expert said.
Tata Power has a consumer base of five lakh in Mumbai of which nearly 65 percent are those consuming below 300 units per month.