State-run Brihanmumbai Electric Supply & Transport (BEST) is relying on a 2011 judgment that revoked licence granted to a company to distribute electricity in an area with an existing licensed distributing company to prevent the Maharashtra Electricity Regulatory Commission (MERC) from considering the licence application of Tata Power in Mumbai.
The rejoinder filed by BEST on June 17, says a legal precedent was set in the 2011 case of Noida Power Company vs Paschimanchal Vidyut Vitaran Nigam.
Noida Power had filed the case disputing the issuance of a licence to Paschimanchal by the UP Electricity Regulatory Commission, arguing that the latter does not comply with norms of capital adequacy, creditworthiness and code of conduct as enumerated under Section 14 of the Electricity Act, 2003.
The judgment also noted that, “In terms of provisions of the Act and the second licence Rules, there cannot be a phased development of the distribution network in the case of the second licence.”
“In spite of having a parallel distribution licence in the Mumbai suburbs, Tata Power has failed to develop its distribution network to its (obligations) in the last five years,” the BEST’s rejoinder affidavit which quotes Shrikant Khedkar, deputy general manager of BEST, states.
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BEST argued that Tata Power does not have a network for retail distribution in Mumbai city limits and allowing the development of a distribution network in a phased manner will be contrary to the law.
“In this case, the State Commission has granted a five-year time period to develop the network for the supply of electricity in the area, which is contrary to the very intent of prescribing the time lines for meeting Universal Service Obligation under the provisions of Act, 2003, the Regulations and the Supply Code,” the APTEL said in its 2011 judgment which the BEST quoted in its rejoinder.
BEST is also relying on Section 42 of the Electricity Act which says, among other points, that in a case where a local authority is supplying electricity, consumers in that area cannot ask for new discoms as a matter of right.
“Mumbai city already has a very well developed distribution network belonging to BEST. The city of Mumbai is so congested that developing a duplicate network cannot happen without wastage of national resource and if done, can be of hardly any benefit to consumers,” BEST stated. A senior official in BEST said that Tata Power has filed its response to the rejoinder.
“We are yet to read (Tata Power’s) reply properly but on the face of it they are saying that a rejoinder cannot be considered in the regulatory process. They haven’t said anything which challenges the Paschimanchal judgment,” the official said.
In May, the Supreme Court dismissed an appeal filed by BEST in which it sought to restrain Tata Power from laying its network to provide power supply to consumers in its license area. BEST supplies electricity to the area from Colaba to Sion.
“Tata Power welcomes the Honourable Supreme Court’s ruling allowing consumers serviced by BEST in the Mumbai Island City to choose their service provider for electricity. This ruling will foster competition and result in better services and tariff for consumers,” Tata Power told FE when asked to comment on BEST’s rejoinder.
Pallavi Ail | The Financial Express