BEST's power monopoly ends, Tata enters island city





BEST's power monopoly finally came to an end on Friday . Tata Power Company (TPC) has now been granted a distribution licence in Mumbai for the next 25 years, and it will now set foot in the island city--giving residential consumers a chance to switch to cheaper power.

This could be a big blow to BEST, which has been serving 10.5 lakh consumers between ColabaCuffe Parade and SionMahim areas for several years. BEST officials apprehend large-scale poaching and "cherry picking" of consumers by TPC.

Although MERC mentioned in its order that it was granting the licence "in public interest", it also pointed out TPC's "inadequate network rollout plan" and directed Tata officials "to approach the commission in 6 weeks with a fresh rollout plan". MERC's order clearly stated: "The rollout plan submitted by Tata Power Company (TPC) is inadequate as it seeks to cater to 50% of the total expected load by catering to only 31% of consumers, which is not conducive to a level playing field and genuine competition. In its rollout plan, TPC has not addressed the past directions issued and timelines prescribed by the commission. TPC has also not proposed a detailed methodology to ensure that laying of network will be done to ensure supply to all categories of consumers including the category of consumers with lowest consumption.

"TPC has faced several operational difficulties which have delayed its network expansion. Therefore, the commission deems it appropriate to specify a phasewise rollout to ensure that TPC lays its network in its entire area of licence in a time-bound manner," the order pointed out.

BEST had strongly opposed TPC entry, stating that its very existence will be endangered and around 47,000 employees would become jobless. It also informed MERC that that this could result in political and social unrest and may lead to a law and order problem. The commission, however, observed that the Electricity Act allowed existence of two or more parallel distribution licencees in the same area and, as held by the Supreme Court, no exemption was provided for a local authority to that extent.

The order stated: "TPC has been authorized to supply to all consumers in areas which include those covered by BEST. Thus, two licencees are already operating in the area of BEST. Considering this fact, the commission is of the view that there is no merit in the apprehension of BEST that owing to the grant

of a licence in its area to any other person, the very existence of BEST will be endangered. BEST would require to address the competitive environment through its own performance."

Tata Power also got a transmission licence granted for the transmission and the receiving stations (or Transmission Receiving Stations) located in and outside the Mumbai area, owned by TPC or proposed to be constructed and owned by TPC in future and form ing part of Intra-State Transmission System of Maharashtra.

In a statement issued on Friday , TPC said it will "support BEST's case for transport subsidy to be rationalized across each electricity unit collected so that it's not just left to BEST to collect the same. It will also make sure that BEST's margin of business is not affected adversely as it has been a longterm participant in power supply system in Mumbai."