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Can Mumbai get its groove back: Some solutions to power crisis

The government and the four organisations must scout around for whatever captive capacity is available in and around Maharashtra.

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RV Shahi

Mumbai has the advantage of having four successful organisations working to provide power supply — the Brihanmumbai Suburban Electric Supply (BSES) which is now Reliance Energy (REL), Tata Power, the Brihanmumbai Electricity Supply and Transport undertaking (BEST) and the Maharashtra State Electricity Board (MSEB). Only in recent years has MSEB’s financial condition deteriorated. Otherwise, it used to be one of the best electricity boards in India.

The strengths of these four organisations have obviously not been fully used to cope with the increasing demand for power in Mumbai and adjoining areas. This is evident from the fact that none of them has added any capacity in several years.

Procedural wrangles over whether they should be allowed to go ahead have come in the way of installing new capacity. As a result, neither REL nor Tata Power has been able to add any capacity since 1995.

At one stage BEST too wanted to set up a generation plant, but was not allowed to do so. Similarly, MSEB failed to add any significant capacity in the last 10 years.

The short-term solution is to take a leaf out of Pune’s book. That is, the government and the four organisations must scout around for whatever captive capacity is available in and around Maharashtra.

Pune has demonstrated that even if you buy up to 10 per cent of the regular requirement at Rs8-10 per unit, in order to free the city from load-shedding, the overall impact on consumers isn’t more than 8 per cent of their electricity bill.

Today, any consumer would be prepared to pay 8-10 per cent more if quality power without load-shedding or interruptions can be assured.

A medium-term solution would be for the state government to encourage co-generation power plants in rural areas with sugar factories. These could come up in two years.

Another medium-term solution is to make all efforts to see that the Ratnagiri plant produces 2100MW of power, by sorting out the fuel supply and commercial issues. In any case, the burden on the consumer due to Ratnagiri power will not be too high.

The long-term solution is to set up a dedicated task force at a very high level to ensure 10,000MW of additional capacity in 3-4 years. This is not only possible but easily doable.

The Pune model: Pay more to avoid cuts

The Confederation of Indian Industry (CII) and an NGO named Prayas worked out a framework to avoid load-shedding in Pune — although now the MSEB has announced that load-shedding will resume in Pune because of the acute shortage of power in Maharashtra. The Pune framework worked out earlier was as follows:

The distribution company would get power from captive plant operators using liquid fuel, and the rate would be Rs8-10 per unit. The total amount of purchase would be in the range of 100-120 MW.

All consumers with consumption below 300 units would be exempted from any additional tariff burden.

Other consumers would bear the burden of additional cost on account of purchase of about 100 MW power at higher cost.

The additional cost burden on those consumers using more than 300 units of power per month was of the order of 8-10 per cent.

This structure was presented to the Maharashtra Electricity Regulatory Commission and implemented.

But now load-shedding is set to resume as the power shortage across the state has increased.

RV Shahi is former secretary with the union ministry of power. He spoke to Neeta Kolhatkar

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