Maharashtra orders Tata Power to continue Mumbai supply

Under instructions from the state government, the Maharashtra State Load Dispatch Centre (MSLDC) has written to Tata Power Co that it must continue to supply the full 360 MW to Reliance Infrastructure for distribution in Mumbai's suburbs. TPC had threatened to cut 160 MW of supply to R-Infra, which it said had been dragging its feet on entering into a hard-and-fast power purchase agreement.

On Saturday, the Maharashtra government had replied to TPC's notification on cutting supply to R-Infra. The government in its letter said an extraordinary situation has arisen in Mumbai, which could adversely impact a large section of subsidised consumers. "There is no mechanism to protect subsidised consumers via levy charge on migrating consumers."

The state wants the Maharashtra Electricity Regulatory Commission (MERC) to consider the situation in public interest. "MERC needs to issue directions within the ambit of the Supreme Court order and Electricity Act," it said, according to a CNBC-TV18 report.

If TPC withdraws current ad-hoc arrangement, it may impact Reliance Infrastructure adversely, the letter stated. "Reliance Infra may not be able to compete on fair terms as Mumbai licensee. It is responsible to make 360 MW available to Mumbai at reasonable rates."

Tata Power, it added, is obligated not to sell power above the regulated rates in Mumbai. ''We feel the ad-interim solution suggested by the Maharashtra government is fair. However, Tata Power may suggest any other arrangement in public interest. We expect Tata Power to co-operate with government."

TPC is yet to communicate its final decision to MSLDC, which looks after the scheduling of power in the state. MSLDC is also awaiting communication from the MERC.

Tata Power last week had communicated to SLDC that from Sunday midnight it would like to schedule 100 MW to BEST (which supplies power to most of mainland Mumbai) and 160 MW to Tata Power Distribution Co, while it would continue to supply 198 MW to Reliance Infrastructure at a higher rate of Rs5.90 per unit.

But the ruling powers are clearly averse to any step that would raise prices for its consumers, even while it has no concrete solution to the problem.