'Tata Power can't sell power outside when Mumbai in deficit'

The Maharashtra government, in a strongly worded letter, has told Tata Power Company that the company is obligated to make power available for Mumbai consumers and cannot sell any portion of this power outside Mumbai when any Mumbai licensee is deficit.

The Government has also communicated to the Tata group company that it cannot sell power to any other Mumbai licensee or their own consumers, at prices higher than the regulated rate.

"The Government is also of the view that facts and circumstances related to creation of the generation capacity under reference by Tata Power, including its commitments and declaration to make the power available for the consumers of Mumbai, obligate Tata Power (Generation) and the distribution licensees of Mumbai not to sell any portion of this power to any other Mumbai Licensee or to their own consumers at a rate which is higher than the regulated rate and not to sell power outside Mumbai when any Mumbai licensee is deficit," State Energy Secretary Subrat Ratho's letter dated May 14 to Tata Power Executive Director, S Padmanabhan, said.

The letter further asked Tata power to co-operate with the Government and the regulator MERC in devising a fair and reasonable solution in the on-going power tussle between Tata power and R-Infra, an Anil Ambani group company.

"The Government only expects Tata Power to co-operate with the Government and the MERC in devising a fair and reasonable solution at the earliest in public interest, without precipitating the matter to the detriment of a large number cross-subsidised consumers of Reliance Infra in the extra-ordinary circumstances which prevail at present," the letter said.

The letter observed that "Tata Power is in an unanticipated position of dominance in the absence of a PPA with R-Infra' and any offer of power at a higher rate than regulated price would 'adversely affect the large number of cross-subsidized consumers of R-Infra."

It further said that MERC should consider the fact that there is no mechanism "to protect the interest of a large number of cross-subsidised consumers" and "can prevent cherry picking of consumers by Tata Power." The State Government expects the regulator MERC to come out with regulations or orders or advices to 'prevent the abuse of its dominant position by any licensee or generating company which is likely to cause an adverse effect on competition,' the letter said. "...any such arrangement has to include the responsibility of Reliance Infra to make 360 MW power available to its consumers at a reasonable price within a reasonable time in the absence of a PPA (Power Purchase Agreement) with Tata Power," Ratho's letter said.

When contacted, a Tata Power official said "We got the letter," and refused to comment further.