Tata Power’s disqualification from 250-MW BEST auction stayed

Published On: 08, Dec 2017 | Source: financialexpress.com

The Maharashtra Electricity Regulatory Commission has temporarily stayed the decision of state power utility Brihan Mumbai Electric Supply and Transport (BEST) to disqualify Tata Power from participating in its 250 MW auction. Tata Power filed a petition with the state regulatory authority after it had been disqualified from bidding by BEST. The company claimed that the clarifications sought by it from BEST “induced” it to “change its position and act on the clarification”, which eventually led to its being disqualified from the auction. The company said it was not informed about the date of the opening of the bids by BEST. “If BEST’s action of disqualifying Tata Power is allowed, then any utility can give a contract to any chosen entity by disqualifying the other parties.” MERC in an interim response issued late on December 6, said Tata Power had requested the commission to permit it to submit a compilation of the relevant judgments of the Supreme Court. “The commission allowed the same, and directed TPC to submit the compilation within three days.”

The commission further noted that this was not a final view in the matter and it shall give its order after a detailed study of all the documents and the relevant Supreme Court judgments. The commission directed BEST to refrain from taking any further action in the context of this bid, such as issuing of letter of award or signing of a PPA. “Till the commission issues the final Order in this matter, the commission is of the view that this would not cause undue hardship to any of the parties involved,” the statement said. Earlier, there were reports that BEST tenders have received bids at much lower rates compared to what Tata Power supplies at present, especially, from Dhariwal Power, Adani Power and state-run power distribution utility Mahavitaran Ltd. Tata Power’s agreement with BEST is coming to an end on March 31, 2018.

Bids are reported to have ranged between Rs 2.62 per unit and Rs 3.45 per unit, while Tata Power at present charges BEST Rs 4 per unit. The lower rates could help BEST save around Rs 700 crore per annum. The current annual power purchase bill of BEST is about Rs 3,200 crore. Reduction in the power cost for BEST, it was reported, could have a significant impact on consumer tariffs, resulting in them being reduced by 45 to 60 paisa per unit. This could not be independently verified by FE. BEST supplies power to the city of Mumbai, between Colaba and Sion, Nariman Point and Mahim, and serves around 10 lakh consumers.