R-Infra admits buying costly power for suburbs, blames Tatas

Even as the Maharashtra Electricity Regulatory Commission (MERC) has sought expression of interest for a new power distributor for Mumbai's suburbs from next year, current supplier Reliance Infrastrure, which is under fire for hiking its electricity rates, today said its tariff was higher than other distributors as it has to buy power from the market at relatively expensive rates.

The company, which issued a statement today following protests against its move to raise tariffs by the public as well as political parties, alleged that "Tata Power was causing injustice to its consumers by reducing allocation of power from 762 MW to 500 MW, leading to high tariff increase for its consumers" - thus compelling R-Infra to buy power from outside at a higher price to keep its consumers free from outages, it said.

The mud-slinging between the rival distributors has been continuing for at least a year, as suburbanites are upset with paying more for electricity than their city cousins. It should be said that most of the vituperative statements come from the feisty Anil Ambani's company - the junior Ambani has never been shy of washing his dirty linen in public. The Tatas, on the other hand, have been more dignified in their responses.

Experts agree that since R-Infra's own power sources are limited, it is buying more expensive power from elsewhere. They say this may prevent it from bidding for the fresh MERC tender after its licence expires on 15 August next year.

After the Shiv Sena, the Bharatiya Janata Party and the Maharashtra Navnirman Sena protested against the proposed hike by R-Infra, the ruling Congress also has joined the protest, seeking government intervention in the matter.

"Tata Power, by keeping Mumbai consumers power-starved, displayed their profiteering attitude and exploited the shortage economy by selling power outside Mumbai to states like Punjab, Andhra Pradesh and Tamil Nadu," R-Infra said in a statement.

The company also charged that despite its pending requests with Tata Power and readiness to sign long-term power purchase agreement for Mumbai consumers, "it was all the time turned down by Tata Power".

RInfra is one of the four companies distributing power in Mumbai. While, it has a power generating plant of its own, it needs to buy power from Tata Power as well. The two companies have been at loggerheads for the last couple of years. (See: MERC seeks new power distributor for Mumbai suburbs)