BEST to end Tata Power’s monopoly

Published On: 01, Dec 2017 | Source: Timesofindia

BEST to end Tata Power's monopoly and buy 'cheaper' 550 MW from other entities.

It's the beginning of the end of a 91-year-old affiliation. Tata Power will no longer have a monopoly over the supply of power to Brihanmumbai Electric Supply and Transport (BEST) as BEST will be buying 550 MW of its 750 MW requirement from other suppliers.

The BEST, which had floated tenders for its requirement, received bids from Dhariwal Power, Adani Power and state-run power distribution utility Mahavitaran Ltd. The bids are reportedly substantially lower than the present rate being charged by Tata Power.

The bids range between Rs 2.62 per unit to Rs 3.45 per unit. Tata supplies power to BEST at Rs 4 per unit. The low rates are expected to help BEST save around Rs 700 crore per annum. Its current annual power purchase bill of BEST is around Rs 3200 crore. This will have a significant impact on consumer tariff too, which might be decreased by Rs 45 paisa to Rs 60 per unit.

The BEST, which supplies power to the island city between Colaba and Sion, Nariman Point and Mahim, has around 10 lakh consumers.

The island city's total requirement of power is 750 MW out of which 300 is the base load which means that this much power is required to run the south-end of the city round the clock. And it requires another 450 MW during peak hours.

Mumbai's peak hours, however, are slightly different from the rest of the state. Where in the rest of the state you have morning peak hours and evening peak hours, Mumbai has daylong peak hours beginning at 10.00 am and ending at 6.00 pm as, during these hours, air conditioners are cooling massive office spaces.

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While Dhariwal Power and Adani Power will supply a base load of 300 MW, Mahavitaran will be supplying 250 MW during peak hours. Tata Power will continue to supply 200 MW during peak hours due to transmission corridor constraints. Due to inadequate transmission infrastructure, the BEST is not in a position to bring in more than 550 MW of power from outside. This constraint is not faced by Tata Power, whose power generation unit is located at Trombay in Mumbai.

Experts, nonetheless, believe these constraints will also be overcome within three or four years as work on augmentation of power transmission network is currently underway.

Meanwhile, Tata Power has filed a petition before state power regulator Maharashtra Electricity Regulatory Commission (MERC) challenging BEST's decision to disqualify it at the pre-qualification stage of bidding from the bidding process. The hearing for this petition will be held on December 6.

MERC's designated consumer representative Ashok Pendse said, "The most curious case is of Mahavitaran, which has quoted the figure of Rs 3.45 per unit when its own average power purchase cost is Rs 4.05 per unit. I fail to understand why it is subsidising for Mumbai consumers at the cost of state consumers."

Interestingly, Mahavitaran had to order load-shedding in the state due to spurt in power, so if it finds itself in a similar situation again, will it honour its commitment to BEST? Pendse queried.

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