Cheaper power: Island city may not benefit much

On April 4, the Appellate Tribunal for Electricity (ATE) dismissed an appeal by the Brihanmumbai Electricity Supply and Transport (BEST) undertaking, which supplies power to the island city of Mumbai, that the state regulator cannot allow other distributors to do business in its area. Dharmendra Jore reports.

On April 4, the Appellate Tribunal for Electricity (ATE) dismissed an appeal by the Brihanmumbai Electricity Supply and Transport (BEST) undertaking, which supplies power to the island city of Mumbai, that the state regulator cannot allow other distributors to do business in its area.

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This means that consumers migrating to Tata Power will be able to make substantial savings in their electricity bills. However, Tata will have to set up its own network. The company does have a network in the island city, but it does not cover all parts where the BEST supplies power — from Cuffe Parade to Mahim in the west and Sion in the east.

However, the island city may not benefit much in the long term. Industry expert Ashok Pendse told HT that Tata will have to supply migrated consumers in 30 days wherever it has its own network, and it will have to connect new consumers in one year wherever it does not have its own wires. Tata cannot use BEST wires because of a special legislation that bars the undertaking from allowing other utilities to use its wires.

“Laying a new network will be an additional burden on the consumers. Those who want to save money will have to pay more. And, there will be a time when Tata’s supply could be as expensive,” Pendse said.

Last year, the state regulator asked Tata to be careful in incurring capital expenditure on laying the network as it felt any extra costs would burden consumers through tariffs. Currently, Tata supplies power to some residential complexes and commercial establishments such as malls (formerly textile mills) in the island city. Tata power costs between 50 paise and Rs 3 less than BEST.