Tata Electric, BSES must expand in phases: panel

One of the main reasons for not granting TEC additional generation was that it would affect MSEB’s revenue, sources said. The licensee company pays a fixed amount as demand charges to MSEB for its electricity requirement, whether it buys or not. It was feared that TEC would not need to buyelectricity from MSEB if it enhances its own generation which will affect the latter’s assured earnings from TEC.

On the other hand, BSES which buys electricity from TEC wants to hike its generation to stop purchases from TEC and cater to the growing demand in its region.

The two power majors had planned to increase their generation capacity in the state a few years ago but the state was yet to clear them under Section 14 of the Electricity Act. These companies would obtain the formal approval from MSEB. Their expansion plans were already given in-principle approval from the state and board.

TEC, the licensee power company in the state, had initially submitted its proposal to set up a 450mw power plant at Bhivpuri over four years ago but no final decision was been taken on the issue.

BSES, which supplies electricity to the city’s suburbs, planned to increase generation to 1000mw from 500mw by putting up another 500mw station. The company has already obtained statutory clearances from the centre andstate agencies but the state government is yet to give the final go ahead for the project.

BSES earlier planned to put up the new plant at Dahanu close to its existing unit. Due to pressure from environmentalists, the company decided to change the location and put up the plant near Palghar.