After being granted distribution licence afresh for 25 years on August 14 by the Maharashtra Electricity Regulatory Commission (MERC), Tata Power was in for a shock on Thursday when the Appellate Tribunal for Electricity (Aptel) issued a stay order and brought back all restrictions on retail distribution.
The Aptel order favouring Reliance Infrastructure stated: "... it is also to be pointed out that if limited stay is not granted, Reliance would suffer a loss because of the fact that there is a possibility of Tata Power to connect with high end consumers of Reliance directly through Tata Power laid network."
The Aptel final hearing will now be on October 10. Consumer activists Sandip Ohri and Rakesh Abrol raised concerns over the Aptel order that goes against the Supreme Court judgment of July 2008, which said both the MERC and Aptel had exceeded their brief in not letting Tata Power enter the retail space in Mumbai.
Besides, the very purpose of the Electricity Act 2003 to promote competition stands challenged again by Aptel, they said. "Reliance must realise that they can't have restrictions through such stays forever. It goes against the tenets of the Electricity Act," said Ohri.
RInfra in a statement said: "We welcome Aptel's order, which is in line with MERC's earlier view. This order will protect 23 lakh low-end subsidised consumers from tariff shock. We welcome competition in the interest of consumers within the framework of the law. We shall await Aptel's final outcome with reference to the need of distribution licensee to meet the Universal Service Obligations to serve its consumers on its own network as required under the Electricity Act."
MERC had earlier imposed several restrictions on Tata Power which went against the interest of competition and prevented cheaper resource to consumers of the city.
Subsequently, Tata Power was directed by MERC to supply power through laying down its own cable network to about 9-odd lakh low-end consumers in 11 clusters of Mumbai within a year.
Tata Power found the target too high and the time schedule too tight to connect with low-end consumers which was less than nine months, after accounting for a four-month monsoon period.
These restrictions were removed when Tata Power licences for distribution was issued afresh by MERC on August 14. The Supreme Court in its order of July 2008 said... "Tata Power had all along been supplying electrical energy directly even to retail customers whose maximum demand was less than1000 KVA and no objection thereof was raised by either BSES or REL (Reliance Energy then) till the year 1998 when Tata Power submitted its proposal for domestic tariff for approval to the Board. It was only thereafter that REL raised its objection in the form of its petition to MERC under Section 22 (2)(e) and (n) of the ERC Act 1998."
The apex court judgment further said... "Having earlier held that MERC had overstepped its jurisdiction in making out a third case which had not been made out by BSES and had on the basis thereof issued orders which had not even been prayed for by BSES, we quash the orders passed both by MERC and the Appellate Tribunal for Electricity and allow all these three appeals upon holding that under the terms and conditions of the licenses held by it, Tata Power is entitled to effect supply of electrical energy in retail directly to consumers, whose maximum demand is less than 1000 KVA."
Tata Power in a statement on Thursday said: "It is disappointing that Aptel has stayed MERC's order removing restrictions for consumers of all categories to make a choice of switching to Tata Power distribution services in Mumbai. The choice of multiple distributors in Mumbai was to allow consumers the benefit of the competitive services and prices available through different service providers. "
According to Ohri, Tata Power will once again knock the doors of Supreme Court as it has no choice if this is how regulators go about competition under the Electricity Act.