RInfra will continue to light up suburbs
Suburban power supplier Reliance Infrastructure (RInfra) will retain its electricity distribution licence because it is the only company to have its own distribution network.mumbai Updated: Jun 25, 2011 01:09 IST
Suburban power supplier Reliance Infrastructure (RInfra) will retain its electricity distribution licence because it is the only company to have its own distribution network.
On Friday, chairman of the Maharashtra Electricity Regulatory Commission (MERC), VP Raja, said that the solicitor-general of India had told the commission that any other company that seeks a parallel distribution licence in suburbs will have to have its own distribution network.
Raja said this at a meeting of MERC’s state advisory committee, a panel of important electricity distribution and generation companies and senior energy officials.
Hindustan Times was the first to report the opinion of the solicitor-general of India on the matter on June 8.
The MERC started the licensing process last year because RInfra’s permit will expire on August 15. Four other companies including Lanco Infratech, Indiabulls Power Limited, Torrent Power Limited and the Maharashtra State Electricity Distribution Company Limited (Mahavitaran) applied for the licence.
But any other company seeking a suburban distribution licence will need to spend a huge amount on building its own network within the stipulated time frame. Industry sources said the cost of building a parallel network would cost more than Rs15,000 crore and it would consume more time keeping in mind the suburban topography and lack of space.
Morever, RInfra’s consumers who opt for a new supplier may not necessarily get to use Rinfra’s network by paying carrying charges till their new supplier builds its own wires. The cost of infrastructure will also be passed on to consumers.
MERC sources said most users were happy with RInfra’s service although they were unhappy with its higher tariff. But RInfra has assured that they will reduce the tariff to the lowest possible rates by 2016. Currently, Tata Power Company sells power at the lowest rates in the city but it has not bid for the licence because it already had one for the entire city.
A public hearing on RInfra’s application would be held on July 9 at Bandra’s Rangsharada Auditorium.