Tata Power challenges Maha govt directive

Tata Power finally bit the bullet and filed a writ petition in the Bombay high court on Wednesday against the Maharashtra government.

The petition is against a state government memorandum, which had asked the company to continue supply of 360 Mw of power to Reliance Infrastructure at a regulated rate of Rs 3.70-4.40 per unit.

The company also requested the court to quash the report of a five-member panel chaired by the state chief secretary on this issue.

Tata Power has also made Reliance Infrastructure, the city's civic body-run BEST and Tata Power Trading Company as respondents.

"Tata Power has also sought an ad-interim order restraining government entities from taking any further action till the final decision on its writ petition," the company said in a statement.

The company said it is "distressed that its rights and customers interests are being sacrificed for the benefit of one operator. The recommendation of the state government further supports an inefficient distribution licensee who has repeatedly failed to fulfill its obligation to arrange power for its consumers as stipulated under the Electricity Act, 2003.The decision taken by the government does not factor in the fact that Reliance Infrastructure's 160 Mw load has shifted to Tata Power and hence its requirements also need to be fulfilled."

According to the company, it was also disappointed that the State Load Despatch Centre (SLDC) was not performing its statutory duty to schedule 160 Mw to Tata Power-Distribution under the pretext that the matter has been referred by the state government to the regulatory commission.

Our distribution business is suffering an additional financial burden of about Rs 60 lakh per day on account of this illegal refusal to schedule 160 Mw power to us, which will ultimately have to be borne by the consumers of Tata Power-Distribution," the company said.

Tata Power said the state government has expressed certain opinion with regards to its generation assets, which were not covered by power purchase agreements with a distribution company in the state.

"This is clearly contrary to our rights under the Electricity Act 2003, which has been approved by the Supreme Court. In our view, MERC doesn't have jurisdiction over such generation assets that are not covered by power purchase agreements," it added.

Meanwhile, the state government said the SLDC should maintain status quo regarding 360 Mw unless and until Maharashtra Electricity Regulatory Commission (MERC) gives any direction in the matter.

The move is crucial especially when MERC has convened a hearing on June 28 on the matter. MERC has restricted the hearing only on the state government's memorandum of May 7, in which the government has suggested that Tata Power has an obligation to supply electricity from its generating stations at the regulated rate.

Besides, the government has asked MERC to put in place a mechanism to ensure that subsidised customers of Reliance Infrastructure do not have to suffer abnormal tariff rise only on account of the effect of migration of its cross subsidizing consumers to Tata Power which is in a dominant position.