MERC seeks new power distributor for Mumbai suburbs

Even as the 27.24 lakh suburban Mumbai power consumers continue to agitate over the recent electricity price hike, political parties lead agitating suburbanites over the recent power tariff hike, the Maharashtra Electricity Regulatory Commission (MERC) on Tuesday floated an expression of interest bid for a new power distributor from next year.

The licence of Reliance Infrastructure, the current distributor, expires on 15 August 2011. MERC wants reputed companies and joint ventures with expertise in power distribution, including R-Infra, to take over distribution in suburbs. Companies are required to submit their application by 4 November 2010. Three other companies – Tata Power, BEST and Mahavitaran – also distribute power to the stipulated areas.

Any eligible national company or consortium of national and international utilities with 10 years' experience in the field, can bid for the licence for the area that consumes more than 1,400 mw daily. 

Meanwhile, the recent tariff hike of 7 per cent allowed to R-Infra by MERC after giving a clean chit to the former`s accounts has angered political parties. On Tuesday, Congress and Shiv Sena staged agitations and called on Reliance officials with a request to go slow on tariff hike. BJP is holding an agitation on the issue on Wednesday. 

The change of licensee is, however, unlikely to drastically reduce the suburban tariff, which is the highest in the state, feel industry sources. 

''Reliance doesn't have enough power of its own. It buys expensive supply from outside and, hence, needs to recover higher costs from its consumers,'' said an expert, requesting anonymity.  ''Any company that wants to keep tariff low will have to procure less expensive power which is a distant possibility in the near future,'' the official added.