4 new suppliers bid for licence to supply power to suburbs after MERC refuses to automatically.
Five firms, including the current supplier R-Infra, are in the fray after Maharashtra Electricity Regulatory Commission (Merc) sought bids for a license to supply power to Mumbai's suburbs.
The firms include Maharashtra State Electricity Distribution Company Ltd (MSEDCL), India Bulls Power, Lanco Infratech and Torrent Power, other than R-Infra itself. Tata Power chose not to bid, which experts reckon, is a wise move that will keep its tariff on a lower side.
R-Infra's license to supply power to 27 lakh consumers in suburbs ends in August and MERC had declined its appeal to automatically renew the licence citing there is no such provision in the Electricity Act, 2003. R-Infra has been in the eye of the storm over the last few years following high power tariffs and is engaged in a pitched battle with Tata Power that has lured consumers with lower rates.
MSEDCL, in its public notice, has mainly relied upon its consumer base, which is 1.86 crore strong in Maharashtra, aggregating annual revenue of Rs33,000 crore. It has not mentioned in the notice where it is going to source the power from.
Hyderabad-based Lanco Infratech boasts to be one of the largest independent power producer with a generating capacity of 3,292 megawatt that has a programme to augment the generation to a whopping 15,000 mw by 2015.
Gurgaon-based India Bulls Power has said it is developing 54,00 mw power projects in Nashik and Amaravati, but has not mentioned when they are going to be functional. Its project in Amaravati is being met with fierce resistance by locals who have alleged that the government is diverting their precious water resources to the plant.
Ahmedabad-based Torrent Power's application is most interesting as the company has sought license in only one of the zones — from Bandra to Vile Parle. This allows the firm to minimise consumers (4.01 lakh) from slums and a high density of commercial and the higher-end of residential consumers. To be fair to the company, it has also been supplying power in Bhiwandi that is notoriously famous for power thefts and no one wanted to take it up.
R-Infra's notice boasts of its customer service — how it has widest payment options (over 2,200), how it is now offering bills even in Braille, option of 19 languages for consumers, and uninterrupted power supply through technological advances. It speaks of its most awarded power plant at Dahanu, but doesn't mention its capacity or the need to source power from other sources.
The surprising absentee from applicants has been Tata Power that has taken away several thousands of R-Infra's customers. Sources in Tata Power explained that they already have access to Mumbai suburbs and therefore do not need to seek a blanket license. "MERC has given us approval to spread our network on how the customers want us to. We had submitted a Rs2,000 crore proposal for expansion," said a Tata Power source.
Experts, however, reckon that by not taking up the entire spectrum of 27 lakh consumers, Tata Power has played a smart game. "R-Infra's rates are higher because apart from less generating capacity, they also have to cater to a large base of domestic consumers that leaves little scope for cross-subsidisation. If Tata Power took them over, they too would need to raise their tariff and will lose the edge they have over their competitors," an analyst pointed out.
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