Industrialists Back Torrent Power's Bid For Licence; MSEDCL, Unions Raise Red Flags
MSEDCL
and workers' unions strongly opposing it.
The Maharashtra Electricity Regulatory Commission (MERC) held an e-public hearing on Tuesday, which saw sharp divisions among stakeholders.
TPL sought a distribution licence for areas under Nagpur Municipal Corporation (NMC) and the adjoining regions of Kamptee, Hingna, Mouda, and Kalmeshwar, along with parts of Pune, Mumbai suburbs, and Thane-Palghar. The online public hearing on Tuesday was for all these areas together.
While the majority of attendees, including MSEDCL officials and union leaders, voiced their opposition, power sector expert RB Goenka and several industries in Nagpur region came out in favour of the application.
"There is a need for a parallel distribution licensee to develop competition in the power sector and to break the monopolistic nature of business of MSEDCL," said Goenka. Quoting the Electricity Act, he added, "The commission shall grant the licence for distribution of electricity without prejudice to the other conditions or requirements under this Act, comply with the additional requirements (including the capital adequacy, credit-worthiness, or code of conduct) as may be prescribed by the central govt, and no such applicant who complies with all the requirements for grant of licence, shall be refused grant of licence on the ground that there already exists a licensee in the same area for the same purpose.
"
MSEDCL, however, strongly opposed the move, raising concerns about the financial and operational impact of granting a parallel licence. The utility cited several grounds, including the risk of stranded power purchase agreements, distortion of cross-subsidy mechanisms, competitive imbalance, and redundancy of existing infrastructure.
"Considering the current demand and projected demand until 2035, MSEDCL entered into long-term power purchase agreements.
If existing consumers are allowed to switch to another provider, the fixed cost burden will increase on the remaining consumers. This would jeopardise MSEDCL's financial stability," the state discom stated.
Advocate Deepa Chavhan, representing TPL, dismissed MSEDCL's arguments, adding that the Electricity Act, 2003, already opened the sector to competition, and discoms like MSEDCL had 22 years to prepare. She also cited a Supreme Court ruling that held that licences could not be denied to new entrants solely because their presence would cause financial loss to the incumbent utility.
Prayas Energy Group's (PEG) representative Shantanu Dixit said the current petition failed to address key risks. "Parallel licensee petitions do not address the risks of cherry-picking high-value customers, network duplication, and power procurement planning inherent in the proposed approach," he said.
Given the long-term impact on Maharashtra's power sector, PEG recommended that any new licences should be subject to clear commitments on meeting Universal Service Obligations (USO) within 5–7 years.
"The Commission should establish comprehensive operational frameworks as detailed in Section 3 of this submission," PEG added.
MERC is expected to review all stakeholder submissions before arriving at a decision that could potentially reshape the power distribution landscape in the state. Currently, parallel licensees are operating in Mumbai and other suburbs, and their power tariffs are very low compared to MSEDCL.
Box
POWER-FUL ARGUMENTS
Torrent Power applied for power distribution licences in Nagpur, Pune, Mumbai suburbs, and Thane-Palghar
RB Goenka, backed by six industries association, supported it, saying it would end MSEDCL's monopoly
Goenka said law allows a new licence if all conditions are met
MSEDCL and unions opposed licence, citing financial and operational risks
MSEDCL said cost burden would rise on remaining users if TPL allowed to operate
TPL lawyer said parallel licence should be issued if all criteria are met under 2003 Act
Prayas Energy Group (PEG) warned of cherry-picking high-value customers and network duplication
PEG suggested licences must include 5–7 year service obligation plans
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