‘Consumers should not suffer for RInfra’s faults’

The ongoing power dispute between Reliance Infrastructure (RInfra) and Tata Power Company (TPC) is more of commercial than consumer interest, consumer activist groups, such as Prayas and Thane Belapur Industries, said on Monday.

Activists suggested that to prevent similar disputes in future, the Maharashtra Electricity Regulatory Commission (Merc), which is playing the role of adjudicator, will have to make distribution licensees (in this case RInfra) accountable for their failure to procure power at a reasonable rate on a long-term basis.

Apart from that, generation assets created, based on the certainty of regulated revenue, by power companies (in this case TPC), and keeping in mind the power requirement of Mumbai, should be made available solely for the city.

The suggestions came at a public hearing organised by the Merc. The commission, as per a recommendation made by a state-appointed committee, had sought public opinion on three issues:

Whether TPC has any obligation to supply electricity at a regulated rate to RInfra; whether, in the absence of a power purchase agreement with RInfra, TPC should take advantage of its dominant position by selling/diverting electricity to its own distribution company, or sell electricity to RInfra at a higher rate; and lastly, suggestions for a mechanism that would ensure that subsidised consumers do not suffer abnormal tariff rise if high-end consumers shift to another distribution licensee.

Prayas, a Pune-based consumer organisation, said consumers had shelled out Rs1,000 crore for RInfra’s failure to procure power.

“But the company has not suffered any loss. It recovered all profits and incentives from consumers, as permitted in the Electricity Act, returns on equities,” Shantanu Dixit of Prayas said.

Activists said TPC’s generation units were created to meet the power demands of Mumbai. “The current scenario shouldn’t be exploited at consumers’ cost. TPC should supply its surplus power (except the portion allocated to BEST) directly to consumers in Mumbai, and not route it through a trading company to earn profits,” Dixit said.

Ashok Pendse, energy activist, said, “The disputed 700MW accounts for 50% of the 1400MW required for RInfra consumers.

The market rate is Rs7 per unit. The suburban consumers will have to bear the higher cost. It should be borne by the company through its return on equity.”