Mumbai ‘power war’ between TPC, R-Infra escalates
22 Apr 2010
Anil Ambani Group firm Reliance Infrastructure, a power producer, on Wednesday hit out at Tata Power Co saying the Tata group power utility plans to sell a large quantity of electricity outside Mumbai to rake in a huge profit.
"They (TPC) plan to sell a large part of the capacity outside Mumbai. This will lead to supernormal profits (around Rs 1,200 crore) to TPC," R-Infra chief executive and whole-time director Lalit Jalan said. He added that the metropolis will suffer from a shortfall, which will result in power being purchased from outside and push up costs for the consumers in Mumbai.
Reliance Infra supplies power to Mumbai suburbs. TPC used to sell 500 MW to R-Infra but had threatened to stop doing so from 1 April on the ground that the latter had refused to sign a power purchasing agreement (PPA) with it.
The Maharashtra government then intervened and asked both firms to maintain status quo till this month-end. With this status quo deadline nearing, the two companies have once again resorted to blaming each other for not arriving at a PPA.
On 19 April, TPC told a news agency that its 60,000-strong customers would face increased tariffs if they continued to provide 500 MW to R-Infra at a discounted rate. "As the state government has ordered us to continue supplying power to R-Infra, we will have to procure power from outside. This will cost more to our customers," TPC executive director (operations) S Padmanabhan had said.
Denying this, R-Infra said that TPC has unnecessarily created a controversy as it wants to sell power outside Mumbai at a higher rate. "This would be against the spirit of the Electricity Act, which provides for protection of consumer interest," Jalan said.
