Tata Power Company’s aggressive expansion in Mumbai received a setback from Maharashtra's power regulator the Maharashtra Electricity Regulatory Commission (MERC). The power regulator has ordered that for the next one year, large electricity consumers such as commercial establishments and industries cannot switch from one distribution company to another.
MERC also directed Tata Power, not to cherry-pick consumers of Reliance Infrastructure (distribution) under the switchover process, as it has took away almost 260,000 customers of Reliance Infrastructure in the past two years, luring them with lower tariff.
Reliance Infrastructure had to charge a higher tariff to subsidise 22 lakh low-end consumers who were billed Rs 3-6 per unit, where as Tata Power, which started retail distribution in Mumbai only two years ago, does not have this burden. Considering Reliance Infrastructure’s petition, MERC ruled that only residential consumers using up to 300 units of power can switch distribution companies.
