Power play: BEST asks MERC not to renew Tata Power's licence

In an apparent move to safeguard its own interests by giving the issue a public interest spin, BEST has written to the Maharashtra Electricity Regulatory Commission (MERC) asking it not to renew Tata Power's licence, which expires on August 15.

The MERC verdict will decide whether electricity consumers in the island city get to choose their provider. Representation pic/Thinkstock

If the licence is renewed the way Tata Power wants, it will be able to make a foray into the Colaba-Sion/Mahim area, which has so far been a BEST monopoly.

The BEST, in its letter to the MERC, has said having a parallel duplicate network would only mean the wastage of a national resource, and the capital expenditure incurred by Tata would be passed on to the customers, leading to a hike in tariffs.

"Crores of rupees will be wasted in laying a duplicate network in an already congested space. There is hardly any space left below the surface of roads as there are several utilities laying claim to it," said a BEST official on condition of anonymity.

"If Tata Power makes capital expenditure in laying lines and cables, obviously there will be an increase in the tariff charged to consumers. What is the point of having another distributor?" questioned the BEST official.

They have also written to the MERC stating that ‘Open Access' is prohibited in the area of the local authority in this case the BEST, which is a supply arm for the civic body under Section 42 (3) of Electricity Act.

The BEST has also mentioned that only one year is allowed for all the licensees to lay their network, however it's been five years since Tata Power got permission, yet they have not laid it. The Supreme Court had recently allowed Tata Power to lay cables in the island city.

The undertaking also claims that Tata Power will cherry-pick by choosing high-end consumers like commercial offices in Nariman Point and Lower Parel and high-end residential societies, and would simply ignore all those who consume less than 100 units.

Preserving monopoly
Power experts and even BEST officials speaking off the record, however, admit that the move is designed to preserve BEST's monopoly in the island city, which has nearly 10 lakh consumers. "While all the arguments put forth by the BEST are valid, the move is, to a large extent, designed to prevent competition in the island city.

The BEST has enjoyed a monopoly in the island city, and it does not want to let that revenue dwindle by any competitor's entry," admitted a BEST official, on condition of anonymity. A public hearing had been called for on Thursday, July 10, for people's opinions on the issue to also become known.

Tataspeak
A Tata statement on the issue reads, "Tata Power is of the opinion that all consumers should be able to choose their service provider for electricity.

This choice will foster competition and also pave the way for customers to avail competitive tariffs and better customer service. We understand that it is with the intent that the Hon. Supreme Court has granted distribution license for BEST areas to Tata Power."

"The company aims to provide 24x7 uninterrupted power to the city of Mumbai and deliver the best customer service and the right to choose their service provider. Tata Power is working towards expanding its network in the city to reach a bigger residential customer base in the city and serving them with reliable, affordable and quality power," it adds.