SC allows Tata Power to retail Power to Mumbai

Get set for (re)entry of Tata Power in the Mumbai Retail sector.

See this..

Increased competition is good news for 25L electricity consumers who are presently 'suffering' under R-ADAG's tyranny.

Now, to clear out a few doubts (no doubt, created by some vested interests):

1. Tata Power does NOT have to apply for a fresh License, as reported in some sections of the Press. It already holds a valid license for supply to the whole of Mumbai. In fact, the interpretation of that very license was the one questioned by REL in the Supreme Court. So the question of a 'fresh public hearing' (which is mandatory before grant of a license) need not be held.

2. Tata Power does not need to file for a fresh 'Tariff Order.' It has already received an approval for its latest Tariff Order as it is already supplying electricity to Mumbai and already HAS some retail consumers. MERC had put a 'stay' on it getting 'new consumers' below 1000 kV, but it was (and is) already serving many consumers in the general retail segment.

3. Tata Power need not set up an entirely new distribution network. The Electricity Act 2003, in its great wisdom, had already forseen this situation and already provides for any distributor using the distribution assets of another (to avoid cost-escalation). The second distributor woulod need to pay the first one a charge for usage, called 'wheeling charges'. Incidentally, MERC has already approved standard wheeling charges as well.

The only delay I foresee is in the logistics of the execution. REL will now give TPC a hard time in freezing these wheeling charges (and also in finalising the modalities of which assets it can 'share').

The other side issue that arises is that of REL's requirement of electricity, now that many of its customers may want to move to TPC.

REL may now, not need so much electricity from outside its Dahanu plant and hence need not buy 'expensive power'. Also, it may not need so much of capital expenditure.

Hence, its chargeable tariff may actually come down !! Right ?

Well, maybe I'm not so smart after all ;)