Mumbai: Reliance Infrastructure Ltd (R-Infra), under flak after it recently hiked electricity charges, received a setback on Thursday with Tata Power Co. Ltd deciding to stop supply of 500MW of power to it beyond 31 March.
Tata Power said that it was stopping power supply after March as Reliance Infra has not entered into any power purchase agreement (PPA) with it. Currently, Tata Power supplies electricity of up to 500MW to Reliance Infra without a PPA.
Tata Power has asked Reliance Infra to make alternative arrangements for power beyond 31 March, a company official said.
Snapping ties: A file pic of Tata Power plant in Mumbai. The firm supplies electricity of up to 500MW to R-Infra without a PPA. Santosh Verma / Bloomberg
The company is continuing to supply power to the Anil Ambani-controlled company so that no inconvenience is caused to the citizens of Mumbai, the official said.
Tata Power has traditionally been supplying power to the erstwhile Brihanmumbai Suburban Electric Supply, now run by Reliance Infra.
Tata Power was under no obligation to supply power to any entity without a PPA, its official added.
Under the Electricity Act of 2003, it is mandatory for a distribution licensee to sign a PPA with a generation company so that the interests of consumers are protected, the official said.
The official claimed that Tata Power’s stand was upheld by the Supreme Court on 6 May and said that Reliance Infra had no legal right to insist on getting supply of electricity from Tata Power.