Tata Power, Reliance Infrastructure strike deal on Mumbai power supply: report
06 May 2009
Reliance Infrastructure is reported to have agreed to sign a power purchase agreement (PPA) for 500 M W with Tata Power Company for distribution in suburban Mumbai after it lost a case against TPC in the Supreme Court.
The Supreme Court on Wednesday set aside a petition filed by Reliance Infrastructure and approved the power purchase agreements signed by Tata Power and the Brihanmumbai Electricity Supply and Transport Undertaking and its distribution arm.
Anil Aambani firm Reliance Infrastructure had challenged the agreement, which had earlier been approved by the Maharashtra Electricity Regulatory Commission.
Tata Power had signed a PPA with BEST for 800 MW and another with its distribution arm for 477 MW.
The SC held that "section 23 of the Electricity Act of 2003 does not give any jurisdiction to MERC to allocate any power to a non-contracting discom," said Tata Power in a statement.
Tata Power and Reliance Infrastructure are yet to agree on the quantity of power and the duration of the PPA and has left a decision on the power tariff to the the Maharashtra Electricity Regulatory Commission (MERC).
Reports quoting Reliance Infra sources said the companies have agreed to sign a PPA for 500 MW and the agreement will be executed once the terms and conditions are decided.
TPC, which has generation capacity of 1,777 MW, used to sell around 650 MW to BEST and 760 MW to Reliance Infrastructure and the rest to bulk consumers like the railways, airport and other utilities and some industrial consumers.
A dispute arose after Reliance Infrastructure's share in the TPC power came down by around 150 MW and the former was forced to buy power from the spot market at rates that go up to Rs 9 a unit in summers.
