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High Voltage drama

Saturday, June 26, 2010
By Bonsy Desai

RInfra goes all out against Tata Power with a booklet campaign; Tata Power takes a cooler approach but the electricity battle is here to stay.

From November 2009 till date approximately 50,000 consumers of suburban Mumbai have switched over from RInfra to Tata Power Company for their electricity supply.

On the other hand, RInfra claims that approximately 1,15,000 consumers have been added to its consumer category since last year.

About 28 lakh suburban consumers received booklets from RInfra earlier this week telling them how Tata Power Company has been selfish and created in their own words “a position of dominance and monopoly and used this position to make super normal profits.”

Besides this RInfra has also started a website ‘Ask Mumbai Ask,’ where they provide evidence to prove their accusations, besides encouraging feedback and discussion boards from Mumbaikars.

A source from TPC said that RInfra’s campaign against TPC is their attempt to mislead the consumers and move attention away from the fact that it is an irresponsible distributor.

RInfra supplies electricity to approximately 28 lakh consumers in Mumbai, of which about 70 per cent are low-end consumers, and the cost of electricity charged to them is almost negligible. Of the 1,400 MW that it needs to supply, RInfra can generate only 500 MW at its Dahanu power plant and the rest has to be procured from other generators, including TPC. A RInfra spokesperson said that this procurement cost plays a large part in the retail component tariff and therefore the high-end RInfra consumers bear the brunt of this problem.

TPC - A source from TPC, on the other hand, said that even with the TPC’s supply of 500 MW, RInfra always fell short of 400 MW which it purchased from the spot market at almost 5 to 7 times the regulated price, which in turn affected its consumers. TPC has also officially stated that it is ready to take 4 lakh of RInfra’s low-end consumers, and become direct suppliers to them, so as to lessen the burden on both, RInfra and its high end consumers.

RInfra has clearly stated that through its monopolistic approach, TPC and its shareholders are making a super normal profit at the cost of Mumbaikars, a staggering Rs.1,200 crore of extra profit!

TPC spokesperson said that Tata as a company had always been a very transparent organization and that all their annual reports were clearly placed on their website. “Please let anyone look them up and tell us where we are making super normal profits from,” he concluded.

RInfra has also said that 100 MW of power generated from Mumbai is supplied outside Mumbai by the TPC to make extra profits to the tune of Rs.300 crore. And all this after taking all the necessary permissions from the government to ensure that the power supply would be restricted only to Mumbai.

TPC says that it has clearly presented its power sales table according to which they supply only 2 per cent power outside Maharashtra. 95 per cent they claim, goes to Mumbai distribution agencies itself. TPC has further added that the power is sold outside Maharashtra only when it is refused by the state, after a notice period of 90 days.

These allegations are just the tip of the iceberg, if both TPC and RInfra are to be believed. Both these giants have also accused each other of not signing an official Power Purchase Agreement (PPA) as per the Electricity Act 2003. The end result is that as the days pass, this battle seems to be escalating, with the consumer watching from the centre, trying to understand the dynamics of these power companies and make a choice that will not burn a hole in their pocket.

Can Mumbai have a uniform tariff rate?

RInfra has suggested the concept of a uniform tariff rate for Mumbai, just like the system followed in Delhi and several other metros. But a source from TPC explained, “Delhi has two major power distributors, Relaince and Tata. But power is purchased by the Delhi state government and distributed to the two as per their needs. The scenario in Mumbai is completely different, with four distributors including BEST and MSEB, but in this case Reliance and Tata are also generators of power, with Tata being the major generator. So how will the uniform tariff rate work practically in Mumbai?”
 

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