Mumbai Power Tussle – Competition against Consumer’s Interest

By - Tarak OzHa, Borivali(W)Dated - 28.06.10

Competition In Electricity Distribution Why is Competition Created in Mumbai?

To Benefit Consumer ?

OR

To Benefit Utility ?

Is Cheap Power available to Residential Consumers?

Is it availed by Commercial Consumers ?

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Cross Subsidy Consumer Mix

Cross Subsidizing

Cross Subsidized

Total

Reliance

4 L 24 L 28 L

BEST 3 L 7 L 10 L

Tata 0.25 L 0.25 L 0.5 L

Huge Disparity in Cross Subsidized Consumer Mix

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Cross Subsidy Consumption Mix

Cross Subsidizing

Cross Subsidized

Total

Reliance4849000000(56%)

3827000000(44%)

8676000000

BEST3014000000(71%)

1250000000(29%)

4264000000

Tata2612000000(99%)

27000000(1%)

2639000000

Huge Disparity in Cross Subsidized Consumption Mix

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Cross subsidy & Consumer Mix

• Reliance Energy’s Cross-Subsidizes 24 lac consumers … Much more than others

• Reliance having Cross Subsidy of approx Rs 1000Cr, highest among All Three Distribution Company.

• Every where else in the Country Cheaper power is made available to Utility having Large Cross subsidized Consumers to check the Tariffs

Mumbai seems to be exactly Opposite…. Why ?

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On top of This… What is Newly Introduced Competition Doing ?

• Consumers have started Migrating to Tata Power from Reliance Energy

• Industrial & Commercial Consumer are Mostly Migrating

• I understand 95% Consumption Migrated is this type

• Residential Consumers with lower Capacity to pay are left high and dry

• I understand 200 Crs more cross subsidy increased on Reliance Energy

• I understand that Airport migrated on first day but No slum customer has

migrated till date

Has MERC Introduced Competition for Malls / Multiplexes /Airport and such selected Consumers ? Or for Consumers with lower capacity to pay.

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Power Scenario in Mumbai• Power Generated for & In Mumbai (Tata Power and Reliance Energy)

• Total Mumbai Power Demand of Mumbai

• Mumbai shortage 600 MW (20%)

Tariff difference 75 - 100% due inequitable allocation

2527MW

3100 MW

What MERC has done to bring up Generation so that Mumbai is not Power Deficit?

Have you recommended at least to the Government of Maharashtra

I am raising this because this question is tied up closely with Increasing Tariffs which is your responsibility.

MERC can certainly decide on…..

Who should get how much power and at what rate and what should be the basis?

Should shortage be shared by all three utilities when there is little power in the Country and Cost are exuberant?

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Monopoly in Generation? - By TATA POWER…. MERC … Pl ask these questions

Do not undermine your power – You have the Power to ask questions?

If you look down …. Where do we look for justice ?

• Why Tata Power Withdraw of 262MW Power from Reliance?

• Why Tata Power is withdrawing 500MW from Reliance?

• Why Tata Power is Selling Power Outside Mumbai ?

• Why Power Deficit is not equally shared?

Cabinet Sub committee who have given their studied recommendations says…..

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Extract From Cabinet Sub Committee ReportPage 11 of 36: Chapter-II

Page 18 of 36: Chapter-III

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Extract From Cabinet Sub Committee ReportPage 19 of 36: Chapter-III

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Queries To Be Answered

• Should TPC be allowed to sell power outside Mumbai?

• Should Migration of High End Consumers Allowed at the Cost of Cross Subsidized Segment

• Should Disparity of Tariff Being continued Irrespective of same location and same consumer category

Wake up MERC … Now the ball is in your court

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If you do not wake up ?

As Per Report and News Publication, Reliance Tariff May Further Hike2-3 Folds, If Same Situation Persist.

• Be Prepared, It May Get Worse this time Or ACT NOW…….

Regulate, Control the Situation… Mumbai is Precious for Country

There will be Public-Quack in Mumbai

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You can Regulate by doing…..

Use of Power Guided Under Electricity Act 2003

• Surplus power to be offered first within Mumbai city at Average cost of power

• Levy Cross Subsidy surcharge on migration of Subsidizing consumers so that Balance is obtained

• To execute appropriate PPAs for implementation of Uniform Retail Tariff

Thank You