Race for power licence gains momentum | mumbai | Hindustan Times
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Race for power licence gains momentum

Even as suburban power supplier Reliance Infrastructure (RInfra) has taken a step ahead to offer some relief to its 27-lakh consumers by reducing the average tariff, the race for distribution licence in RInfra area has gained momentum. The regulator, however, has not yet decided on the allocation.

mumbai Updated: Mar 06, 2011 00:58 IST
Dharmendra Jore

Even as suburban power supplier Reliance Infrastructure (RInfra) has taken a step ahead to offer some relief to its 27-lakh consumers by reducing the average tariff, the race for distribution licence in RInfra area has gained momentum. The regulator, however, has not yet decided on the allocation.

After inviting expression of bids, the Maharashtra Electricity Regulatory Commission (MERC) is now mulling whether the RInfra distribution could be given to one company or split among several players. This step becomes imperative as RInfra’s license expires in August this year.

An industry expert said because the matter concerns regulatory process, MERC would have to consider many complex issues put forth by the bidders. “We may get new licensees, but tariff could still be an issue as MERC wants the rates to be reasonable.”

Four companies — Maharashtra State Electricity Distribution Company Ltd (MSEDCL), Indiabulls, Torrent and Lanco — have applied for the license. All have submitted their business plans to the regulator. RInfra now needs a daily supply of 1,400 megawatts (MW), of which RInfra pools in 500 MW from its own generation plant and manages the rest from other sources.

RInfra has challenged the MERC move saying its license would be valid for another 20 years. But the company hasn’t explained as to where an additional 600 MW of inexpensive power will come from.

Inexpensive power means less burden on consumers. RInfra has been spending more on buying expensive power as Tata Power Company doesn’t supply it the required quantum.

MSEDCL, which cannot supply uninterrupted power to its 1.70-crore consumers across the state, barring Kanjur Marg, Bhandup, Mulund and Thane where consumers pay more, has told MERC that it would be in a position to give 1,400 MW to suburbs from August 2011.