Reliance may not get to cherry pick power zones

The government is planning to stop power utilities from "cherry-picking" lucrative zones in its proposed guidelines for grant of parallel distribution licences.

The move could impact Reliance Energy's application for licences to supply power to south Mumbai and Navi Mumbai, Nagpur, Pune, Aurangabad and Nashik.

Power zones

The move could impact Reliance Energy's application for licences to supply power to south Mumbai and Navi Mumbai, Nagpur, Pune, Aurangabad and Nashik The proposed guidelines will specify the smallest "distribution entity", which could be a circle, a district, a town or even a state Depending on the size of the distribution entity, power utilities could apply for a second distribution licence in each

The south Mumbai area is now being served by the Bombay Electric Supply and Transport Undertaking while the Maharashtra State Electricity Board supplies power to the other five circles.

Maharashtra is at present divided into two distribution areas, Mumbai being one, and the rest of the state the other.

The Maharashtra Electricity Regulatory Commission will have to grapple with Section 14 of the Electricity Act, 2003, before granting distribution licences to Reliance Energy in these circles.

The section provides for grant of a second distribution licence "within the same area" that is being serviced by a utility, MSEB in this case.

This means that, at present, a new applicant for a second distribution licence in Maharashtra can apply for a licence in Mumbai or for the rest of the state.

According to government officials, the proposed guidelines will specify the smallest "distribution entity", which could be a circle, a district, a town or even a state.

Depending on its size, power utilities could apply for a second distribution licence in each, officials said.

Reliance Energy has also applied to the Delhi Electricity Regulatory Commission for a second distribution licence in the lucrative New Delhi Municipal Council zone.

In Maharashtra, the company is targeting around 2 million customers in six new areas, which are primarily urban and industrial hubs.

With a second distribution licence in the BEST area, Reliance Energy can gain access to its consumer base of around 850,000 people in south Mumbai.