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‘Can you give cheap power?’

The Maharashtra Electricity Regulatory Commission (MERC) on Friday asked Reliance Infrastructure (RInfra) whether it could provide affordable power to 27.24 lakh suburban consumers, when the power supplier stunned the state regulator by claiming its distribution licence was still valid.

mumbai Updated: Dec 04, 2010 02:17 IST
Dharmendra Jore

The Maharashtra Electricity Regulatory Commission (MERC) on Friday asked Reliance Infrastructure (RInfra) whether it could provide affordable power to 27.24 lakh suburban consumers, when the power supplier stunned the state regulator by claiming its distribution licence was still valid.

The MERC was hearing RInfra’s petition that its licence be renewed because it expires on August 15, 2011.

At the hearing, however, RInfra made a departure from its petition and contested the MERC’s move to invite new entities to distribute power in the suburbs. It demanded that it be given a 25-year licence from June 10, 2004, instead of August 16, 2011, the way the MERC had granted a licence to the Brihanmumbai Electric Supply and Transport undertaking.

“RInfra’s petition did not mention such an argument. RInfra must withdraw or amend its petition before any decision is taken,” consumer representative Sandeep Ohri told the MERC.

Ohri demanded that activists be provided a level playing ground for arguing such cases of consumer interest. “The commission must ensure resources for providing good counsel to ensure proper decisions,” he said. Other activists, Rakshpal Abrol and N Ponarathnam, agreed.

After hearing the parties, chairman of the MERC, VP Raja, asked RInfra to decide its stand and asked for power procurement plans. “The commission is not responsible for procuring power for any utility. Our job is to ensure that you make arrangements and you have repeatedly failed to tell us your procurement plans,” Raja told RInfra.

RInfra told the MERC that it would amend its petition and return to the commission after a week.

RInfra has a generation capacity of 500 mega watts (MW) but needs more than 1,500 MW to meet demand. It buys power from Tata Power Company and other sources to mitigate the gap.

This makes RInfra’s tariff the highest in the state. Matters will get worse because Tata has refused to give RInfra power from April 2011.

On Friday, Raja said only proper procurement will help reduce tariff rates. “The commission will also ask companies interested in suburban business whether they would provide inexpensive supply.”

A senior RInfra official, requesting anonymity because he is not authorised to speak to the media, said Raja’s observations will not be recorded in the day’s official business because many things were said informally at the hearing.

Sources in MERC said that the commission was considering redrawing RInfra’s distribution area so that multiple players will give consumers options.