Tata Power in south Mumbai to cost more

South Mumbai residents will have to continue to bear an additional burden of Rs 15 crore every month. The Bombay High Court, on Friday, decided not to pass any interim order on a petition filed by Tata Power Company (TPC).

South Mumbai residents will have to continue to bear an additional burden of Rs 15 crore every month. The Bombay High Court, on Friday, decided not to pass any interim order on a petition filed by Tata Power Company (TPC).

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The division bench of Acting Chief Justice J.N. Patel and Justice S.C. Dharmadhikari rejected TPC’s plea for interim relief saying no interim order could be passed given the peculiar facts of the case.

THE DISPUTE

n Tata Power Company and Reliance Infrastructure have been squabbling over their power agreement since 1999, when the Maharashtra Electricity Regulatory Commission directed the two to enter into a formal agreement.

n The dispute intensified when TPC began distributing power in RInfra’s domain — the suburbs — in 2008, following clearance from the Supreme Court. Now, TPC has told RInfra that it needs its power for its own consumers in the suburbs and can supply only 200 MW (down from 360 MW), that too at a rate of Rs 5.90 per unit, up from Rs 3.74.

n RInfra has refused to accept these conditions, asking the state government to intervene since snapping ties with TPC could mean power cuts in the suburbs and continuing at the rates demanded would mean raised tariffs.

n The government ordered TPC to supply 360 MW till June and 200 MW till April 2011, giving RInfra time to make alternative arrangements.

TPC had approached the high court to direct the Maharashtra government to allow TPC to utilise 160 MW out of 360 M W being diverted to Reliance Infrastructure (RInfra) from TPC’s generation saying it needed the supply for its south Mumbai consumers.

TPC said it was purchasing power from outside at exorbitant rates putting an additional annual burden of Rs. 280 crore on its consumers.

“We will continue to supply the balance 200 MW to RInfra at a regulatory price, provided the remaining 160 MW be diverted to our south Mumbai consumers,” Chagla told the court.

Chagla said R-Infra had not made alternate arrangements despite a notice from TPC nine months in advance. “They should have been punished for that,” Justice Patel said.

A spokesperson for R-Infra said, “TPC pleaded to the court to set aside the memorandum issued in public interest and the high court rightly rejected their plea.”

Last year, TPC had told RInfra it would stop supplying 360 MW from March 31, 2010 because it needed 160 MW for its own consumers in south Mumbai. The state stepped in and on May 7 directed the State Load Despatch Center (SLDC) to continue supplying 360 MW from TPC’s generation to RInfra.

On May 18, the state again directed SLDC to maintain status quo until the Maharashtra State Electricity Regulatory Commission resolved the issue. Chagla said the state was not empowered to direct an independent entity such as SLDC because the SC had, in 2006 ruled that no one can pressurise generators to supply power to a particular entity.

Advocate General Ravi Kadam said the state was empowered to issue directives but what was sent to SLDC was an advisory.