MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13Th Floor, Cuffe Parade, Mumbai - 400 005 Tel
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MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai - 400 005 Tel. No. 022 22163964/65/69 – Fax 022 22163976 E-mail [email protected] Website: www.mercindia.org.in / www.merc.gov.in Case No. 90 of 2014 In the matter of Application for the grant of Distribution Licence in Mumbai City and Part of Mumbai Suburban Area, [areas of Mira Bhayandar Municipal Corporation including area covered under Chene and Varsave which are contiguous with TPC’s existing area of Licence] Smt. Chandra Iyengar, Chairperson Shri. Vijay L. Sonavane, Member Shri. Azeez M. Khan, Member The Tata Power Company Limited Registered office: Bombay House, 24, Homy Modi Street, Mumbai – 400001 ….Applicant ORDER Dated: 14 August, 2014 The Tata Power Company Limited filed a Petition before this Commission applying for grant of Distribution Licence under the provisions of Section 15 of the Electricity Act, 2003 and Maharashtra Electricity Regulatory Commission (General Conditions of Distribution Licence) Regulations, 2006. The proposed area of supply is within the geographical boundaries of the State of Maharashtra. The Maharashtra Electricity Regulatory Commission, under the powers conferred on it by Section 86(1) (d) read with the Section 14 of the Electricity Act, 2003, may grant licence(s) to persons seeking to act as Transmission Licensee(s), Distribution Licensee(s) and Electricity Trader(s) in the State of Maharashtra. Since Tata Power has applied for grant of Distribution Licence within the State of Maharashtra, this Commission is the Appropriate Commission for this case. Accordingly, this Commission has admitted the Petition and decides the same through this Order. Abbreviations used in this Order Abbreviations used in this Order Abbreviation Meaning ATE/ APTEL Appellate Tribunal for Electricity BEST The Bruhanmumbai Electric Supply and Transportation Undertaking CAGR Compounded Average Growth Rate CEA Central Electricity Authority CSS Consumer Sub-Station DSS Distribution Sub-Station E1 Minimum area of supply requirement E2 Capital adequacy requirement E3 Creditworthiness requirement E4 Code of conduct requirement E5 Requirement of own distribution system EA 2003 Electricity Act 2003 EHT Extra High Tension EOI Expression of Interest FY Financial Year GIS Geographic Information System GoM Government of Maharashtra HR Human Resources HT High Tension IRG Internal Resource Generation kVA Kilo Volt Ampere LT Low Tension MCGM Municipal Corporation of Greater Mumbai MERC Maharashtra Electricity Regulatory Commission MSEDCL Maharashtra State Electricity Distribution Company Limited MVA Mega Volt Ampere MW Mega Watt MU Million Units NDMC New Delhi Municipal Council MERC Order in Case 90 of 2014 2 Abbreviations used in this Order Abbreviation Meaning PAN Permanent Account Number PPA Power Purchase Agreement PGCIL Power Grid Corporation of India Limited PPP Public Private Partnership PVVNL Paschimanchal Vidyut Vitaran Nigam Limited RInfra Reliance Infrastructure RMU Ring Main Unit RPO Renewable Purchase Obligation RSS Receiving Sub-Station S1 Power procurement plan S2 Management and technical expertise SOP Standards of Performance SPV Special Purpose Vehicle TAN Tax Deduction and Collection Account Number TPC The Tata Power Company Limited TPDDL Tata Power Delhi Distribution Limited TVS Technical Validation Session USO Universal Service Obligation MERC Order in Case 90 of 2014 3 Table of Contents Table of Contents 1. BACKGROUND...................................................................................................................................................... 8 1.1. HISTORICAL BACKGROUND .................................................................................................................................. 8 1.2. INVITATION OF EXPRESSION OF INTEREST BY MERC ................................................................................................. 9 1.3. RESPONSE TO THE INVITATION OF EXPRESSION OF INTEREST ....................................................................................... 9 1.4. RECEIPT OF PETITIONS BY THE COMMISSION ........................................................................................................... 9 1.5. TPC’S PETITION FOR DISTRIBUTION LICENCE ......................................................................................................... 10 1.6. TECHNICAL VALIDATION .................................................................................................................................... 11 2. COMPLIANCE WITH SECTION 15 OF THE ELECTRICITY ACT, 2003 ........................................................................ 12 2.1. REQUIREMENT OF NOTIFICATION OF APPLICATION UNDER SUB-SECTION (2) OF SECTION 15 OF EA 2003 BY THE APPLICANT 12 2.2. ADMISSION OF PETITION AND PUBLIC NOTICE OF TPC ............................................................................................ 12 2.3. COMPLIANCE WITH SUB-SECTION 2(II) OF SECTION 15 OF EA 2003 ......................................................................... 13 2.4. PRIMA FACIE ELIGIBILITY OF TPC FOR GRANT OF DISTRIBUTION LICENCE ..................................................................... 13 2.5. REQUIREMENT OF NOTIFICATION BY THE COMMISSION UNDER SUB-SECTION (5) OF SECTION 15 OF THE EA 2003 ............ 13 2.6. NOTICE PUBLISHED BY THE COMMISSION .............................................................................................................. 13 2.7. PUBLIC HEARING ............................................................................................................................................. 14 3. SALIENT FEATURES OF TPC’S PETITION .............................................................................................................. 15 4. OBJECTIONS AND SUGGESTIONS RECEIVED IN RESPONSE TO TPC’S NOTICE OF ITS PETITION ............................ 18 4.1. OBJECTIONS AND SUGGESTIONS RECEIVED IN RESPONSE TO TPC’S NOTICE .................................................................. 18 4.2. OBJECTIONS RAISED BY BEST UNDERTAKING ........................................................................................................ 18 4.3. OBJECTIONS RAISED BY RELIANCE INFRASTRUCTURE LIMITED .................................................................................... 19 4.4. SELECTIVE DEVELOPMENT OF NETWORK/ INADEQUATE NETWORK ROLLOUT ................................................................. 20 4.5. TIME-FRAME FOR NETWORK ROLLOUT ................................................................................................................. 21 4.6. DUPLICATION OF NETWORK ............................................................................................................................... 21 4.7. CHERRY PICKING OF CONSUMERS ........................................................................................................................ 22 4.8. IMPACT ON BEST ............................................................................................................................................ 23 4.9. INADEQUATE INFORMATION IN THE PUBLIC NOTICE ................................................................................................ 23 4.10. ANNEXURE 11 NOT MADE PUBLIC BY TPC ............................................................................................................ 24 4.11. CROSS SUBSIDY SURCHARGE .............................................................................................................................. 24 5. OBJECTIONS AND SUGGESTIONS RECEIVED AGAINST THE NOTICE PUBLISHED BY MERC ................................... 25 5.1. OBJECTIONS AND SUGGESTIONS RECEIVED IN RESPONSE TO THE COMMISSION’S NOTICE ................................................ 25 5.2. OBJECTIONS OF BEST UNDERTAKING TO PROTECT ITS INTEREST AS A LOCAL AUTHORITY ............................................... 26 5.3. BEST’S SUBMISSION ON THE DIFFICULTIES OF INTRODUCING PARALLEL LICENCE............................................................ 28 5.4. BEST’S SUBMISSION ON COMPETITION IN THE INTEREST OF THE CONSUMERS .............................................................. 29 5.5. USE OF RINFRA’S DISTRIBUTION NETWORK ........................................................................................................... 29 5.6. UNIVERSAL SERVICE OBLIGATION ........................................................................................................................ 33 5.7. NETWORK ROLLOUT PLAN SUBMITTED BY TPC ....................................................................................................... 35 5.8. CHERRY PICKING OF CONSUMERS ........................................................................................................................ 38 5.9. OBJECTIONS RELATED TO PHASED DEVELOPMENT OF DISTRIBUTION NETWORK ............................................................. 40 5.10. CAPITAL ADEQUACY AND CREDITWORTHINESS ....................................................................................................... 48 5.11. OTHER MISCELLANEOUS OBJECTIONS ................................................................................................................... 49 6. EVALUATION OF TPC’S APPLICATION FOR GRANT OF DISTRIBUTION LICENCE ................................................... 52 6.1. EVALUATION OF MANDATORY REQUIREMENTS - ELIGIBILITY CRITERIA ........................................................................