Rotational power cuts or tariff hike probable: RInfra

Reliance Infrastructure (RInfra) on Wednesday announced that if the Tata Power Company (TPC) withdraws “the much-needed” 350 megawatts of power, it would be forced to either implement rotational load-shedding in Mumbai or increase the power tariff.
“If the TPC withdraws the 350 MW of power that we are now getting, we will have to impose rotational load-shedding in Mumbai,” said Mr Lalit Jalan, chief executive office of RInfra.
According to Mr Jalan, although RInfra will try to procure the required electricity from elsewhere, it would come at a higher price. So, the added expense would have to be passed on to the consumers.
The RInfra CEO also alleged that the TPC want to withdraw supplying power to them, as they want to sell the same electricity outside Maharashtra at higher rates. As per the calculations displayed by RInfra, the TPC intends to sell 200 MW of power on the open market, which will fetch them an additional Rs 500 crore annually. He said that the TPC is currently selling 100 MW of power to companies outside Mumbai and making Rs 300 crore as annual supernormal profits.
According to RInfra officials, the company’s long-term needs are taken care of, as there are other companies who are currently setting up power plants, and would provide 250 MW to RInfra. However, this power would come to Mumbai only from 2014.
“In the long-term scenario, RInfra’s power rates would be less than the PTPC’s tariffs,” claimed Mr Jalan.
As per a recent order by the five-member committee constituted by the state government, the TPC has to supply power to RInfra till June 30, 2010. “In one of the affidavits submitted by the TPC, they had assured that they would be able to provide electricity to the entire city up to 2014. But now, the TPC is refusing to supply this promised power as it wants to sell the same outside and make profits,” Mr Jalan said.
However, the TPC claimed that they need the power to distribute it to their own
customers and would never sell it outside the state for profit, as claimed by
RInfra. TPC officials had also said that currently, a negligible amount of electricity is being sold outside Mumbai.

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