Suburbs may get new power distributor | mumbai | Hindustan Times
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Suburbs may get new power distributor

The 27.24 lakh power consumers in the suburbs, who are fighting a tariff hike, may have a new electricity distributor from 2011.

mumbai Updated: Oct 06, 2010 02:31 IST
HT Correspondent

The 27.24 lakh power consumers in the suburbs, who are fighting a tariff hike, may have a new electricity distributor from 2011.

The Maharashtra Electricity Regulatory Commission (MERC), on Tuesday, floated an expression of interest bid for the area because the licence of Reliance Infrastructure, the current distributor, will expire on August 15, 2011.

Any eligible national company or consortium of national and international utilities with 10 years’ experience in the field, can bid for the licence for the area that consumes more than 1,400 MW daily.

Three other companies – Tata Power, BEST and Mahavitaran – also distribute power to the stipulated areas. The change of licensee is, however, unlikely to drastically reduce the suburban tariff, which is the highest in the state, feel industry sources.

“Reliance doesn’t have enough power of its own. It buys expensive supply from outside and, hence, needs to recover higher costs from its consumers,” said an expert, requesting anonymity. “Any company that wants to keep tariff low will have to procure less expensive power which is a distant possibility in the near future,” the official added.

Industry sources said RInfra might not apply for the licence because of the prevalent situation.
“People and political parties are protesting against the hike and the company feels it is being targeted,” an expert said.
“The business model of the suburbs has become very tricky and risky is view of lack of inexpensive power,” he added.
Tata power is unlikely to bid as a single entity because it already has a distribution licence for the entire city. Also, because it provides power at the lowest rates, consumers are migrating to it.

The company may form a consortium to bid, said a person who is in the know of the development. The bid will close on November 4, 2010.