Pulling the plug on Mumbai
SHOCK DELIVERY Government lethargy, corporate battles and red tape… Nothing much has changed over the last few years for Mumbai’s power consumer. This summer, prepare for a 600 MW shortfall, power cuts and fatter bills ……….Dharmendra Jore
SHOCK DELIVERY Government lethargy, corporate battles and red tape… Nothing much has changed over the last few years for Mumbai’s power consumer. This summer, prepare for a 600 MW shortfall, power cuts and fatter bills ……….Dharmendra Jore
It’s going to be a long, hot summer. As in the past five years, there will be no respite for Mumbai’s 26 lakh sub- urban power consumers.
The mercury is fast rising and air- conditioners, coolers and fans are already working overtime. Changing lifestyles and the rise in commercial activities will raise the demand further by 23 per cent, nudging it past 3,000 megawatts (MW) a day. However, sup- ply is likely to peak at 2,400 MW — a shortfall of 600 MW. And you could face long power cuts or higher bills.
Blame it on the poor expansion of generation capacity and a fight between two arch corporate rivals — the Tata Power Company (TPC) and Reliance Infrastructure (RInfra).
While the state government made many assurances, it could raise power generation by a mere 1.6 per cent over the past year. That leaves it with little choice but to supply power to Mumbai by depriving other parts of the state, where three- to 10-hour power cuts are the daily norm.
In Mumbai, private companies are the major players. TPC generates power and sells it to the Brihanmumbai Electric Supply and Transport (BEST), which supplies the island city, and the Anil Ambani-backed RInfra, which supplies to all of Mumbai’s western suburbs and most of the eastern suburbs.
The state-owned power utility plays a direct role only in some eastern sub- urbs, where it has managed to do away with power cuts altogether. Although this has meant higher bills, customers are satisfied.
BEST too has enough supply; it’s only RInfra’s customers who face a problem.
RInfra used to buy 500 MW a day from TPC. However, TPC had ambi- tions of its own in the electricity distri- bution market. After the Supreme Court allowed it to distribute power to retail consumers — so far it has only direct- ly supplied bulk users like railways — on its own, TPC said it would stop sell- ing to RInfra from April 1 this year.
TPC, which generates 1,900 MW, wants to use the power to supply its own distribution company and sell the remaining power, preferably to the state- owned distributor Mahavitaran. It was encouraged by its first attempt at retail- ing when many BEST and RInfra con- sumers switched to it because it offers the best rates.
Alarmed by the prospect of long power cuts and a consumer backlash, the government intervened a week ago.
TPC then promised to continue the sup- ply for another month so that the bureaucrats got time to find a solution.
TPC then promised to continue the sup- ply for another month so that the bureaucrats got time to find a solution.
If RInfra is forced to buy power from elsewhere to plug the shortfall, it would have to spend an additional Rs 600-700 crore this summer. This burden is like- ly to be passed on to consumers.
Both TPC and RInfra officials refused to comment, claiming the government had forbidden them from doing so.
Consumer activist Sandeep Ohri said consumers are the ones who will ulti- mately suffer. “What we can do is change our supplier. The Maharashtra Electricity Regulatory Commission can play a major role by encouraging com- petition. It must allow more private play- ers in the city,“ he said.
A senior bureaucrat saw a tempo- rary solution in the offing. “The government may ask TPC to contin- ue supply to RInfra until the worst of the summer ends,“ he said on condition of anonymity because the mat- ter was raised in the Legislature and making statements outside the House would breach protocol.
A senior RInfra official said on con- dition of anonymity that his company was ready to sign a power purchase agreement (PPA) for 500 MW with TPC.
“In 2008, we agreed to sign a PPA with- out preconditions and discuss long-term options for TPC’s Unit 8 [a new unit that came up last year].“ TPC officials countered that it could not be forced to supply power to RInfra.
RInfra said that expansion of its Dahanu thermal plant — which has a capacity of 500 MW — by 1,200 MW would solve Mumbai’s problem. But it’s stuck in red tape. “We have been waiting for environment clearance for 10 years,“ said the official.