07 May,2009 08:08 AM IST | | Shashank Rao
It seems the patch up between corporate rivals Tata Power and Reliance Infrastructure (RInfra) will not lessen the power problems for the city or reduce the current deficit of 600 MW. The two had come together for an agreement whereby Tata Power would supply power to RInfra who would then distribute the power to the suburbs from Mahim to Dahisar. But now, officials from the two companies have admitted that the pact will make no difference to the city's power shortage or a consumer's power bills.
Tall claims
Tata Power has been supplying 500MW to RInfra till now without the formal Power Purchase Agreement (PPA).
RInfra has been supplying this power to the suburbs. Since 2003, the two companies having been trying to work out a mutually acceptable PPA. This pact was shown as a saviour for the suburbs as it would ensure that power would be supplied to those areas without interruption for the next 10 years.
However, in reality, this pact hardly solves the city's power problems. Both RInfra and Tata Power accepted that Mumbai's deficit of 600 MW will continue as the amount of power that is to be agreed upon remains at 500 MW. They will still have to purchase power from other states at costly rates.
Same old bills
The pact would also make no difference to a consumer's electricity bills. Without a formal agreement, RInfra has been buying 500MW from Tata Power at the rate of Rs 4.50 (approx) per unit. Even once the agreement is finalised, there will be no reduction in this rate. Confirmed a spokesperson for Tata Power, "We would continue supplying RInfra at this rate." This is contrary to RInfra's earlier claim that if the pact weren't signed then it would seriously affect suburban consumers. "We would be forced to buy costly power at Rs 12 per unit if pact doesn't happen," a spokesperson for RInfra had said.
The lack of a formal pact with RInfra would not have made it possible for Tata Power sell this 500 MW to any other state. As one official in Mantralaya's Energy department pointed out, "The state government wouldn't have allowed Tata Power to do so. They cannot afford to keep the suburbs in darkness and force people to pay exorbitant rates."
BEST-case scenario
RInfra wants to buy 762 MW from Tata Power. However, Tata Power already has a formal agreement with BEST, which makes it mandatory for Tata Power to supply 800 MW to it. It also supplies 477 MW to its own consumers. This makes it impossible for Tata Power to increase its supply to RInfra. The increase in supply is one of the main terms from RInfra's side.
