MSEDCL ordered to buy power from defunct private company
MSEDCL has expressed its reservations on the proposal, pointing out that its share in Mumbai is just five to six percent, and the government should ask the major suppliers to the city—BEST, Tata Power and Adani Electricity—to buy additional power to face a potential shortage in future.
Mumbai: The Maharashtra government has asked its electricity distribution company, Maharashtra State Electricity Distribution Company (MSEDCL), to buy electricity from a private gas-based plant to ensure an uninterrupted supply of electricity to Mumbai. Significantly, the plant in question has been shut for the last five years, and at the same time, the state’s own Uran gas-based power plant is lying underutilised due to a shortage of gas.
MSEDCL has expressed its reservations on the proposal, pointing out that its share in Mumbai is just five to six percent, and the government should ask the major suppliers to the city—BEST, Tata Power and Adani Electricity—to buy additional power to face a potential shortage in future. It has also pointed out that the state’s decision will result in an increase in power tariff for the electricity consumers of the entire state.
Mumbai and its nearby suburban areas experienced a power outage on October 12, 2020. Following this, several measures were planned to rectify the situation, which had happened due to a shortage in supply. On October 10 this year, the state energy department wrote to MSEDCL, asking it to sign a power purchase agreement with Pioneer Gas Power Limited (PGPL) to buy power for 15 years. PGPL has a 388 MW gas-based power plant in Mangaon tehsil of Raigad district. The letter of the energy department says: “The plant is not operational for the last five years; restarting operations will require three to four months.”
The directive of the state energy department has irked MSEDCL officials as well as energy experts. In its reply to the department, the MSEDCL expressed its reservations.
“In the Mumbai Metropolitan Area, the MSEDCL demand (or share) is about five to six percent only,” reads the letter. “Further, MSEDCL has contracted sufficient capacity on a long-term basis with generators to supply its own demand in MMR and the rest of Maharashtra. Therefore, MSEDCL is of the opinion that the PPA with PGPL should be signed by all Mumbai utilities ie Tata Power, BEST, Adani and the Railways as per their respective share of load in Mumbai demand.” The MSEDCL letter also sought attention to the fact that transmission projects for importing more than 2000 MW power to Mumbai are nearing completion.
Power experts have expressed concern about the energy department’s proposal to sign a PPA with PGPL. “The country is already facing a gas shortage. Many gas-based power plants are affected, and the remaining units are running at 40 to 80 percent of their capacity. So we don’t understand why the energy department is asking MSEDCL to sign a new PPA with a gas-based plant that has been shut for the last five years. It will create a huge burden on power consumers. Secondly, why should state power consumers be forced to pay for Mumbai islanding?” said power expert Pratap Hogade.
Another expert, Ashok Pendse, too raised questions. “Already, MSEDCL has surplus power in normal times. So any new PPA will only result in burdening electricity consumers with bigger bills. It is the responsibility of Mumbai distribution companies, not MSEDCL,” he said. “Secondly, if the government is so keen on running gas-based power plants, it should ensure full gas supply to the Uran gas-based power plant run by the government-owned Mahagenco. The Uran power plant has a capacity of 672 MW but is currently generating only about 140 to 150 MW due to the non-availability of APM.”
When asked, the Maharashtra State Electricity Board Holding Company said that a cost analysis would be conducted before finalising the agreement. “As of now, there is no final decision taken on buying power from PGPL. MSEDCL is examining the proposal and will take a final decision after analysing cost-related issues. And that decision will be subject to approval by the Maharashtra Electricity Regulatory Commission,” said Vishwas Pathak, independent director of the MSEB Holding Company.
State energy secretary Abha Shukla was not available for comment.