Its amazing how the past can come back to haunt you

Here is a news item (TOI, 14-Sep-2003) about how REL (RINFRA's earlier AVATAR), had wanted to get a Distribution License for many cities in Maharashtra. Incidentally, Tata had also applied for few more cities. (Both applications were eventually turned down by MERC.)

REL also wanted to buy power from power producers other than TATA and MSEB. Well its been SIX years since then and RINFRA has still not formally tied up with anyone else!!

Mr. Anil Ambani had a meeting with then then CM, Mr. Sushilkumar Shinde to move this forward. Mr. Shinde, as we all know is now the Union Minister for Power (coincidence?)

Incidentally, while quoting an example of how the 'monopoly' can be broken, an example of BEST's network usage has been given (see second last para).

I do not recall BEST raising an objection at that time, that they were a "Local Authority" ...
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Reliance makes power play for 5 towns
TNN 14 September 2003, 11:48pm IST

MUMBAI: Reliance Energy (formerly called BSES Ltd) has made pitch to light up Maharashtra. Following the central legislation allowing competition among firms selling electricity to consumers, Reliance Energy has made an application to the state government to distribute power directly to homes and offices in five major cities of the state— Pune, Nagpur, Nashik, Aurangabad as well as Navi Mumbai, including Vashi, Nerul, Bhandup, Mulund and parts of Thane.

At present, the loss-making Maharashtra State Electricity Board, which had a revenue deficit of Rs 1,462 crore last year, sells electricity in these areas. Sources said Reliance Energy (REL) filed the application to the state government about ten days ago.

When contacted, state chief secretary Ajit Nimbalkar said the company had made a presentation to chief minister Sushilkumar Shinde last week about setting up a new gasbased power station in the state.

"Among the suggestions made by Reliance was that it also wanted to distribute electricity to various centres," he said. "However, it is too early to comment on Reliance Energy's proposal," he added.

Follwing the meeting between Anil Ambani, CMD of REL and Mr Shinde, the chief minister appointed a committee headed by Mr Nimbalkar to look into the various proposals. "This committee will also examine the proposal to distribute electricity in five towns and cities," said Mr Nimbalkar.

According to industry sources, Reliance Energy wants to set the ball rolling to open up the state's electricity sector, after the passage of the Electricity Act at the Centre allowing competition among players in all aspects of the power sector —generation, transmission and distribution.

Reliance Energy also filed an appeal with the Maharashtra Electricity Regulatory Commission about a fortnight ago to open up the existing electricity infrastructure like power lines to competition and fix the necessary charges.

It wants MERC to allow REL to buy power from players other than Tata Power and MSEB for its operations in Mumbai's suburbs,where it sells power to 23 lakh consumers.

According to the Electricity Act, existing monopoly players have to allow other firms to use their existing infrastructure like power lines for a fee.

For instance, if another firm wants to sell power to customers in Mumbai, it can do so using BEST's network of wires but it will have to pay for it.

However, for this to start MERC has to fix the rental rates for using another firm's network and power lines.

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2009 Bennett, Coleman & Co. Ltd.
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http://timesofindia.indiatimes.com/city/mumbai/Reliance-makes-power-play-for-5-towns/articleshow/181849.cms

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 ;)