We have been patient with Reliance Energy, says Ratan Tata

We have been patient with Reliance Energy, says Ratan Tata

“We do not have a license agreement with Reliance (Energy), for which we have spent many years to get them to sign. We have shown enormous amount of patience and only exercised our right by deciding to merchant-sell the power,” he told shareholders at Tata Power AGM here.

“It’s like selling your shares and coming and asking for a dividend,” Tata said in response to a shareholder query about REL’s claim on TPC’s power.

TPC and Reliance Energy were engaged in a legal battle over supply of 750 MW of power to the Anil Ambani-led company. REL had moved the Apellate Tribunal for Electricity against Tata Power’s decision to allocate 800 MW to civic utility BEST and only 500 MW to REL, which supplies power to some parts of Mumbai. Tatas had submitted that regulator MERC had asked BEST and REL to sign power purchase agreements (PPAs) with TPC, but REL had failed to comply with the directions since 2005.

The Supreme Court, on May 6, had quashed the Apellate decision that had declared the PPA between TPC and BEST (one of the power suppliers in Mumbai) null and void.

It also rejected the tribunal’s ruling that directed MERC to consider REL’s claim over TPC’s power. “The Supreme Court has upheld the validity of TPC’s license to supply power to any consumer in its Mumbai Licensed Area. MERC has permitted power supply to change-over customers,” Tata said.

Currently, Tata Power is supplying up to 500 MW to REL (now Reliance Infra) despite there being no PPA between them. Tata Power has already communicated to Reliance Infra to make alternative arrangements for power beyond March 31, 2010, after which it will sell the electricity to individual consumers in suburban Mumbai.