SC upholds MERC’s nod for Tata Power deal
The Supreme Court upheld the Maharashtra Electricity Regulatory Commission’s (MERC’s) verdict over the sale of electricity generated by Tata Power in Mumbai to the distribution companies in the state. HT Correspondent reports.business Updated: May 06, 2009 23:42 IST
The Supreme Court on Wednesday upheld the Maharashtra Electricity Regulatory Commission’s (MERC’s) verdict over the sale of electricity generated by Tata Power in Mumbai to the distribution companies in the state.
MERC had ruled that the sale of electricity by Tata Power, which generates 1,850 mw (mega watt) in Mumbai, should be done through legally binding documents or the power purchase agreements (PPAs) between the generating and the distribution company.
Reliance Infrastructure (erstwhile BSES), which supplies power to Mumbai’s suburbs, previously obtained 762 mw from Tata Power. However, following shortage of power in the state, Tata Power insisted on the sale of electricity though PPAs only and offered 500 mw to Reliance Infra.
This made Reliance Infra challenge the ruling of MERC, which said the distribution licensees need to have a PPA with the generating company.
Setting aside the petition of Reliance Infra, the Supreme Court approved the PPAs signed by Tata Power for supplying 800 mw to Brihanmumbai Electricity Supply and Transport (BEST) and 447 mw to the distribution arm of Tata Power.
The court also imposed a penalty of Rs one lakh on Reliance Energy for each of the six petitions filed by it.