Before the MAHARASHTRA ELECTRICITY … 58 42/Order-148 and 150 of 2017...Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION ... completion of the various transmission Lines projects

Order – Case Nos. 148 of 2017 & 150 of 2017 Page 1 of 17

Before the

MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

World Trade Centre, Centre No.1, 13th

Floor, Cuffe Parade, Mumbai 400005.

Tel. 022 22163964/65/69 Fax 22163976

Email: [email protected]

Website: www.merc.gov.in/www.mercindia.org.in

CASE No. 148 of 2017

Petition of Tata Power Co. Ltd. (Generation) seeking suspension of medium-term

competitive bidding for procurement of 750 MW by BEST Undertaking

And

CASE No. 150 of 2017

Petition of The Tata Power Co. Ltd. (Distribution) for clarity on certain matters relating

to medium-term competitive bidding for procurement of 750 MW power by BEST

Undertaking

Coram

Shri Anand B. Kulkarni, Chairperson

Shri Azeez M. Khan, Member

Shri Deepak Lad, Member

Tata Power Co. Ltd. (Generation) ....Petitioner (Case 148/2017)

Tata Power Co. Ltd. (Distribution) ...Petitioner (Case 150/2017)

Vs.

Brihanmumbai Electric Supply & Transport Undertaking ....Respondent 1

State Transmission Utility ....Respondent 2

Maharashtra State Electricity Distribution Co. Ltd. ....Respondent 3

Reliance Infrastructure Ltd ....Respondent 4

Appearance

For the Petitioners : Shri. Bhaskar Sarkar

Smt. Swati Mehendale

For Respondent No. 1 : Shri. Rajendra Patsute

For Respondent No. 3 : Shri. Paresh Bhagwat

mailto:[email protected]

http://www.merc.gov.in/


ORDER

Date: 30 November, 2017

M/s. Tata Power Company Limited (Generation) (TPC-G) has filed a Petition on 18.10.2017

(in Case No. 148 of 2017) citing Sections 86 (1) (b) and (k) of the Electricity Act (EA), 2003

seeking suspension of medium-term competitive bidding for procurement of 750 MW by

Brihanmumbai Electric Supply & Transport Undertaking (BEST) in pursuance to the Order

of the Commission in Case No. 25 of 2017 dated 23.9.2017.

2. The prayers of TPC-G in Case No. 148 of 2017 are as follows:-

a) “Admit the instant Petition

b) Considering the urgency of the matter, hold an early hearing of the instant petition

before 25th October, 2017 (extended bid due date of BEST)

c) Direct suspension of medium-term competitive bidding process for procurement of

750 MW by Brihanmumbai Electric Supply & Transport Undertaking from 11th

September, 2017 (issuance of bidding documents by BEST), in view of the reasons

enunciated in the instant petition

d) Direct appointment of an independent agency to assess the realistic time-lines for

completion of the various transmission Lines projects with due reference to STU’s

report and CEA’s report on the Mumbai Transmission Corridor scenario and

conclusively decide the maximum Quantum of power in RTC, Peak 1 and Peak 2 time

slots that can be brought in to Mumbai over next 5 years and beyond

e) Direct STU to study the Transmission System of Mumbai to enable binging power

from Mumbai Periphery to BEST network; and

f) Direct the BEST to revise and re-issue the Power Procurement process as required

based on the outcome of prayer (c) above...”

3. M/s. Tata Power Company Limited (Distribution) (TPC-D) has filed a Petition on

25.10.2017 (Case No. 150 of 2017) citing Sections 86(1)(b) and (k) of the EA, 2003

seeking clarity on certain matters relating to the proposed procurement of 750 MW

power by BEST through medium-term competitive bidding in pursuance of the Order of

the Commission in Case No. 25 of 2017.

4. The prayers of TPC-D in Case No. 150 of 2017 are as follows:

“a) Admit the instant Petition;

b) Considering the urgency of the matter, hold an early hearing of the instant petition

before 31st October, 2017 (extended bid due date of BEST);


c) Provide clarity on the issues mentioned in paragraph 2 of the instant petition, in

the overall interest of the consumers, before conclusion of bidding process for

procurement of 750 MW by Brihanmumbai Electric Supply & Transport Undertaking;

d) Direct STU to ensure that adequate transmission corridor is available to the

Petitioner, as a long term transmission user, to procure power from outside

Mumbai.”

5. As both Petitions have been filed with reference to the Commission’s Order in Case No.

25 of 2017 relating to BEST’s medium-term power procurement plan, the Commission

has decided to address them through this common Order.

6. In its Petition in Case No. 148 of 2017, TPC-G has stated as follows:

6.1. Vide its Order in Case No. 25 of 2017, the Commission approved BEST’s proposal to

undertake medium-term competitive bidding for procurement of 750 MW power for 3

time slots for 5 years from FY 2018-19, in accordance with the Competitive Bidding

Guidelines, under Section 63 of the Electricity Act. However, the Commission has

also appreciated that the issue of transmission constraints remains inconclusive, and

the issuance of the Letters of Award (LoAs) to the successful bidders is dependent on

the transmission constraints scenario.

6.2. The entire process of carrying out the bidding process becomes rather otiose as the

Commission itself has recognised that the transmission constraint scenario is

questionable at this stage. In other words, if the Commission comes to the conclusion

that there are transmission constraints due to which power cannot be brought from

outside Mumbai, then the entire bidding process initiated by BEST would become

futile. Further, the State Transmission Utility (STU) also needs to carry out a study of

whether power can flow from the Mumbai periphery to the BEST network.

6.3. Due to the above, several bidders, including TPC-G, would remain in an

indeterminate state as regards their power sale tie-ups because, even after successfully

winning the bid, the bidder would not be in a position to conclusively tie-up its power

with BEST till the STU and the Maharashtra State Load Despatch Centre (MSLDC)

give their concurrence insofar as transmissions constraints are concerned.

6.4. The Power Purchase Agreement (PPA) between TPC-G and BEST is expiring on

31.3.2018. However, as the outcome of the process of power procurement of BEST

has not attained finality even at this belated stage, TPC-G is unable to make any

alternative power sale arrangements. Therefore, it is necessary for the Commission to

decide on the issue of existing transmission constraints before allowing BEST to

proceed with the bidding process because the future of the power sale arrangements of

TPC-G is solely dependent on its outcome.


6.5. Vide its letter dated 21.6.2017, TPC requested the Central Electricity Authority

(CEA) to carry out System Studies of the Mumbai Transmission System based on the

current and future transmission planning for the Mumbai Area. On 13.10.2017, the

CEA convened a meeting along with the other Distribution Licensees and the STU in

which the issues of transmission constraints were discussed in detail. Although it is

yet to issue its final report, a draft report has been handed over by CEA. The

Commission may consider the findings in the draft report for the purpose of

adjudication of this Petition.

6.6. A summary of the issues identified in the report and subsequently discussed in the

meeting held on 13.10.2017 is provided below:

a) CEA has carried out load flow studies corresponding to FY 2021-22 peak conditions

considering total load of Western Region of the order of 70713 MW as against 46184

MW. The Table below provides the loads of TPC-D, Reliance Infrastructure Ltd.

(Distribution) (RInfra-D) and the rest of Maharashtra considered by the STU, TPC

and CEA. It establishes that the Mumbai load considered by TPC and CEA are similar

as compared to that of the STU.

Loads considered by STU, TPC and CEA

Zone

2021-22

STU Tata

Power CEA

Rest of

Maharashtra

MW 17958 20330 22908

MVAR 4071 4671 4177

Tata Power MW 2573 2821 2710

MVAR 115 125 319

RInfra MW 1525 1631 1703

MVAR 60 64 68

Total

Maharashtra

MW 22056 24782 27321

MVAR 4245 4860 4564

Total Western

Region

MW 47178 55447 70713

MVAR 12117 14455 11328

b) CEA has observed that a few additional 400 kV elements have not been considered by

STU in its studies/reports. Some of these are:

i. Padghe (PGCIL) - Navi Mumbai with Quad Moose

ii. Padghe (PGCIL) - Kharghar with Quad Moose

iii. LILO of Padghe (MSETCL) – Kharghar 400 kV át Navi Mumbai

iv. Aurangabad (PGCIL) - Boisar D/C with Quad Moose.


These are all new Lines that would require approvals from multiple

statutory/regulatory authorities, in addition to Right of Way (RoW) issues till they are

commissioned.

c) As per the transmission augmentation planned to be implemented, power is expected

to be available at Mumbai periphery (Borivali). However, there is no study carried out

as regards the flow of power from Borivali to the BEST area. CEA indicated that the

STU should present the Mumbai plan comprehensively for internal flows.

d) CEA indicated overloading of many Lines under various conditions of tripping of

Lines. The STU needs to study and inform about the mitigation measures to maintain

N-1 and N-1-1 contingency requirements.

e) The time Lines are very important when the reliability of power supply to Mumbai is

dependent upon the schemes yet to be implemented.

f) CEA also indicated that the Western Region Power Committee (WRPC) view is

required on islanding and reliability for metro cities as per the Indian Electricity Grid

Code Regulations, 2010 (‘IEGC’). This view must necessarily be taken before

deciding on reducing the reliability of power supply.

g) Mega Volt Ampere Reactive (MVAR) study needs to be done and individual

Distribution Licensees must provide for necessary reactive compensation.

h) STU is yet to carry out voltage and transient stability studies to evaluate the impact of

fault levels and voltage drops.

6.7. Therefore, till the CEA provides its final report and the issue of transmission

constraints is conclusively decided, it would be prudent to suspend the bidding

process of BEST.

6.8. TPC has carried out revised studies with the same data used by CEA. They indicate

that a few Lines would be carrying power beyond their thermal carrying capacity in

the event of non-availability of these new Lines by the peak of FY 2021-22 (June,

2021) and phasing out of embedded generation. The Table below provides the

comparative flows on critically loaded Lines under various scenarios:

Comparative flows on critically loaded Lines under various scenarios

Line Section With New

proposed Lines*

Without New

proposed Lines*

Config. Cond. Size Thermal

Loading

Limit With

EG

W/O

EG

With

EG

W/O

EG

Kudus _ Padghe 250 300 919 1007 S/C Twin

Moose@

850

Padghe - Kalwa 452 x 2 492 x 2 833 892 D/C Twin Moose 850


Pune – Ghat Kopar 465 536 771 866 S/C Twin Moose 850

Kudus

Transformer

385 x 2 423 x 2 511 x 2 560 x 2 Two 500

* 400 kV Padghe (PGCIL) - Navi Mumbai and Padghe (PGCIL) – Kharghar S/C Lines with

quad moose.

@ STU has proposed to change conductor of this Line with high ampacity conductor without

giving definite time Lines.

The Table below gives the voltage at representative Buses of Ghatkopar and Dharavi with

and without embedded generation and new proposed Lines:

Voltage at representative Buses

Sub-Station With New proposed Lines* Without New proposed

Lines*

With EG W/O EG With EG W/O EG

Ghatkopar 400 kV 399 (0.9975) 389 (.9725) 387 (.9675) 366 (.9150)

Dharavi 220 kV 214 (.975) 207 (.940) 209 (.952) 195 (.888)

From the above Table, it can be seen that the voltage in and around Mumbai would

violate the statutory limits of +/-5% in the event of non-availability of the new

proposed Lines and embedded generation is phased out by FY 2021-22.

6.9. These new proposed Lines are essential before the embedded generation is taken out.

Further, the Padghe – Kalwa and Pune – Ghatkopar Lines would remain critically

loaded even with full embedded generation in operation and would get over-loaded in

case any one Unit is taken out permanently. Decommissioning of any Unit is an

irreversible process, and decommissioned Units cannot be brought on bar in the

contingency of non-availability of these two new proposed Lines during peak FY

2021-22 conditions.

6.10. The CEA has taken cognizance of the fact that the system identified by STU would be

inadequate to meet the loads of Mumbai in the event of decommissioning of

embedded generation, and additional transmission system with high carrying capacity

would be required. As a first step, the additional transmission system proposed by

CEA would require to be approved in the CEA’s Standing Committee for Western

Region. Once it is approved by the Standing Committee, further regulatory approvals

bidding/tendering etc. would be taken. The whole process is time taking and,

therefore, time-lines have to be specified for their implementation.

6.11. Apart from BEST, there are three Distribution Licensees in Mumbai who are Long

Term Transmission System Users of the available Transmission Capacity and pay

Long Term Transmission Charges. The available Transmission Capacity needs to be


allocated amongst the Distribution Licensees to meet their peak demands and also

optimise their cost of power purchase. Such power requirement by all Mumbai

Distribution Licensees in FY 2017-18 was around 772 MW.

6.12. Further, based on the time-lines of proposed augmentation projects given in the STU

report as well as the CEA study report, it is clear that there cannot be any substantial

addition of capacity / change in the present transmission corridor situation in the near

future before commencement of power supply to BEST from 1 April, 2018.

6.13. Therefore, the Commission must necessarily first decide on the Mumbai Transmission

constraints situation before commencement of the bidding process by BEST.

Ambiguity on the issue of Letters of Award (LoA) even after winning the bid would

keep all the Generators, including TPC-G, in an uncertain business scenario leading to

unwarranted loading on cost of power. Clarity on the transmission constraints issue is

a primary requirement to ensure real competitive discovery of price for the benefit of

Mumbai consumers.

6.14. Considering the above, the Commission may appoint an independent agency to assess

the realistic time-lines for completion of the various Transmission Line projects.

7. In its Petition in Case No. 150 of 2017, TPC-D has stated as follows:

Increase in Transmission Charges and Losses and impact of MVAr compensation

7.1. Vide Order dated 23.09.2017 in Case No. 25 of 2017, the Commission has directed

BEST to undertake a competitive bidding process for procurement of 750 MW in

accordance with the Competitive Bidding Guidelines under Section 63 of the EA,

2003. However, the Commission has not provided any conclusion/clarity on the

impact of increase in transmission charges and losses and the reactive compensation

in case the entire 750 MW power would be procured from generating sources outside

Mumbai and the embedded generation is consequently not generating power.

7.2. It is important to examine the cost implications of the increase in transmission losses

and transmission charges as well as the MVAr compensation as these would have an

impact on not only BEST but all the Distribution Licensees in Maharashtra. These

implications are detailed below:

(i) In case the embedded generation of Mumbai is not generating power, the system

would face ‘voltage instability’ and would collapse unless additional and

adequate reactive compensation of more than 700 MVAr is provided in the

Mumbai area to have same quality of supply.

(ii) As per the State Grid Code Regulations, the reactive compensation has to be

provided by the User, i.e. the Distribution Licensees. Most of the Distribution

Sub-stations of TPC-D are unmanned. Accordingly, provision of fixed static


capacitors would not serve the purpose as these would require to be put in on/off

mode according to requirements. Therefore, Static Synchronous Capacitors

(StatComs) with provision for automatic on/off switching would have to be

provided. This would require significant capex of around Rs. 750-1000 crore.

Further, this impact would not be on BEST alone but on TPC-D and RInfra-D as

well. Apart from the cost, this would have a significant space requirement which

is a severe constraint in Mumbai.

(iii) In the event that the entire 750 MW power is imported from outside Mumbai,

transmission losses in the Western Region (WR) will increase by around 418

MW (0.5% of Maharashtra loads). Assuming loss load factor of 0.7%, additional

losses would be around 2,563 MUs, causing an additional burden on consumers

of Maharashtra of around Rs. 1,025 crore.

(iv) The additional capex estimated as above would have a significant tariff impact

on consumers.

7.3. From the above, it is clear that there will be significant cost implications and,

therefore, the Commission ought to provide this clarity before the bidding procedure

of BEST is concluded, and accordingly hold that such charges/costs would have to be

borne by BEST and not by TPC-D and its consumers, on account of BEST procuring

power from outside Mumbai.

Allocation of Transmission Corridor

7.4. In its Order in Case No.25 of 2017, the Commission has not provided

conclusion/clarity on the issue of allocation of transmission corridor to the other

Distribution Licensees.

7.5. In Case No. 25 of 2017, BEST has suggested that the share of each Distribution

Licensee in the limited Transmission Capacity be determined on the same

methodology as for the sharing of Transmission Charges, and that all the remaining

power can be purchased by the Mumbai Licensees proportionately from out of the

embedded generation. In their respective submissions on the presentation made by the

STU on the removal of embedded generation, TPC-D and RInfra-D had also

suggested that the Available Transmission Capacity be allocated among the Mumbai

Distribution Licensees. TPC-D also suggested that the allocation be in the same ratio

as for sharing of Transmission Charges, viz., the respective shares of the Distribution

Licensees in the average of Coincident Peak Demand (CPD) and Non-Coincident

Peak Demand (NCPD) of the three Distribution Licensees.

7.6. In view of the above, the Commission may provide clarity on these issues before the

bidding procedure of BEST is concluded so that TPC-D is assured of a transmission

corridor to meet the power requirement of its consumers and would not face issues

into maintaining reliability of its distribution system and managing its cost of power

purchase.


Requirement of transmission corridor for procurement of short term power by TPC-D

7.7. TPC-D has proposed an optimal power purchase arrangement in its Petition in Case

No. 39 of 2017. It has submitted that, for the entire period of its PPA, there would be

a requirement of short term power which would require a transmission corridor for

bringing power from outside Mumbai. Additionally, whenever there is an outage of

the tied up generating capacities, the transmission corridor would be required to bring

power into Mumbai.

7.8. In addition, TPC-G has indicated that, in the event that BEST does not procure power

from the embedded generation, TPC-G would not be in a position to run its Unit 5 of

500 MW. In this scenario, TPC-D would have to tie up power from only from Units 7

and 8 of TPC-G.

7.9. In that event, the entire power requirement of TPC-D may not be met and it would be

compelled to procure power from outside Mumbai. In order to do so, the transmission

corridor would be required.

7.10. The demand of TPC-D is expected to increase in the future, which would further

increase the necessity of the Transmission Corridor in the absence of embedded

generation in Mumbai.

7.11. However, while arriving at the available Mumbai Transmission Capacity for BEST to

bring 750 MW power from outside Mumbai (vide Order in Case No. 25 of 2017), the

Commission has not given clarity as to how the other two Distribution Licensees of

Mumbai, namely TPC-D and RInfra-D, will be allocated the transmission corridor to

meet their demand.

7.12. Further, TPC-D is also a Long Term Transmission System User, like BEST, and pays

the Long Term Transmission Charges. Accordingly, the Available Transmission

Capacity needs to be allocated amongst the Distribution Licensees to meet their peak

demands and also optimise their cost of power purchase. Therefore, blocking of

corridor unilaterally by BEST for bringing 750 MW power from outside Mumbai

would not be in the interest of justice to TPC-D as well as its consumers.

7.13. In view of the above, the Commission may direct the STU to ensure that adequate

transmission corridor is available to TPC-D, as a long term Transmission System

User, to procure power from outside Mumbai if the need arises and the consumers of

TPC-D are not adversely impacted on account of the allocation of transmission

corridor to BEST.

7.14. The decision of the Commission on these aspects would have a direct impact on the

reliability of power supply as well as cost to all the consumers of Mumbai.


Accordingly, the Commission may provide clarity on these issues before the bidding

procedure of BEST is concluded.

8. BEST’s Reply dated 26.10.2017 to TPC-G’s Petition in Case No. 148 of 2017 is as

below:

8.1. In its Order dated 23.9.2017 in Case No. 25 of 2017, the Commission had held and

directed as follows: -

“42.14. BEST shall approach the STU and the MSLDC for their concurrence

upon conclusion of these three competitive bidding processes and before

issuing Letters of Award (LoAs) for the supply of power or signing PPAs with

the successful bidders.

42.15. The STU and MSLDC shall examine the location of the successful

bidders in the three competitive bidding processes, and jointly assess whether

BEST can avail power from them or if there are any issues in sourcing power

from one or more of them.

42.16. In case there is any issue due to which BEST is unable to procure the

entire 750 MW power through competitive bidding considering the assessment

of the STU and MSLDC, BEST may approach the Commission through a

Petition to address those issues considering the STU and MSLDC’s views. The

Commission would take an appropriate view in the matter at that stage.”

8.2. From these extracts, it is clear that the Commission has taken due care of the

eventualities of transmission constraints for bringing power from outside Mumbai to

cater to the requirements of BEST and other Licensees in Mumbai. The Commission

had also impleaded the present Petitioner (TPC-G) in the proceedings Case No. 25 of

2017 and all its submissions were heard before deciding the matter. Hence, a separate

Petition by TPC-G in the same context does not stand as far as the above decision of

the Commission is concerned and it would amount to re-opening of Case No. 25 of

2017.

8.3. Further, a remedy for any transmission constraints that may be faced in procuring

power from the successful bidders is already available to BEST. In all scenarios, the

contract will be entered into with the successful bidders and power will be procured

from them only after joint assessment of any constraints by BEST, STU and MSLDC.

Hence, all of the concerns of TPC-G with respect to transmission constraints and their

effect on sourcing/bringing power from one or more successful bidders will be taken

care of at the appropriate time as directed by the Commission.

8.4. The bidding process conducted by BEST is conducted in conformity with the Model

Bidding Documents issued by the Ministry of Power (MoP) and as per the directions

of the Commission. TPC-G does not have any locus standi to request suspension of


the bidding process of a Distribution Licensee in general, and BEST in particular.

However, it is open to TPC-G to participate in the competitive bidding process

undertaken by BEST. In case TPC-G emerges as one of the successful bidders, all

such concerns would not only be addressed but also its Plant would remain live as

embedded generation at least for the medium-term.

8.5. Any study with respect to realistic time-lines for completion of the various

Transmission Line projects and the CEA report on the Mumbai Transmission

Corridor Scenario is within the purview of the Commission for decision. BEST as

such does not have any objection to such assessments at the present time or before the

issuance of LoA to the successful bidder. However, it would be prudent to continue

with the bidding process being conducted by BEST, and the assessments of

transmission constraints may go on simultaneously. It is also important for BEST to

fulfil its obligation as a Distribution Licensee to arrange power by the expiry of the

existing PPA with TPC-G, i.e., 1.4.2018.

8.6. BEST refutes the claim of TPC-G that genuine bidders would be attracted only when

there is clarity on the quantum and duration of power that will be finally allowed to be

procured. BEST has seen interest of multiple bidders for the present bidding process,

with 26 prospective bidders having already attended the pre-bid conference and many

are in correspondence with BEST. Even TPC-G was one of the attendees at the pre-

bid conference conducted on 26.9.2017 by BEST in the present bidding process.

9. In its Reply to TPC-G’s Petition in Case No. 148 of 2017, Maharashtra State

Electricity Distribution Co. Ltd. (MSEDCL) has stated as follows:

9.1 MSEDCL had made its detailed submission regarding the power transmission position

in the last one year for the Mumbai Distribution Licensees in Case No. 25 of 2017.

MSEDCL has demonstrated that embedded generation in Mumbai region of around

1877 MW is tied up through Long Term PPAs by Mumbai Distribution Licensees and

is being run continuously, and Short Term Power up to 1000 MW is being purchased

from outside Mumbai region as and when required.

9.1. Accordingly, after analysis of the data and confirmation of STU and MSLDC, the

Commission in its Order in Case No. 25 of 2017 has also recognised the facts and has

confirmed the transmission capacity of Mumbai area as follows:

Summary of Transmission Capacity for Mumbai

A Total Transmission Capacity (TTC) MW 2786

B Reliability Margin MW 500

C Available Transmission Capacity (ATC) (B-A) MW 2286

D MSEDCL Demand MW 248

E Railways LTOA MW 120

F Balance Available for Mumbai Licensees (C-D-E) MW 1918


G. Already Tied up Capacity by Mumbai Distribution Licensees MW 959

H. Balance Capacity Available MW 959

9.2. According to the directives issued in Case No. 25 of 2017, BEST floated three tenders

for procurement of power on medium term basis for 5 years on the Discovery of

Efficient Electricity Price (DEEP) e-bidding portal as below:

Sr.

No

Tender No Period Quantum

(MW)

1 BEST/Medium/Lumpsum Tariff/17-18/ET/56 00:00 to 24:00 300



9.3. In the present Petition, TPC has provided the CEA’s brief report on Mumbai System

Studies in which it is mentioned that the net import to Mumbai Distribution Licensees

on 01.06.2017 has reached 2048 MW (which includes 1089 MW short term power,

i.e. 2048 MW - 959 MW).

9.4. Even in present conditions, as per the MSLDC’s SCADA Data for 13.10.2017, there

is net power flow of 1971 MW (excluding MSEDCL’s demand) to Mumbai

Distribution Licensees. Since the last one year, Mumbai Distribution Licensees are

procuring short term power to the tune of 1000-1200 MW continuously without any

transmission constraints.

9.5. BEST presently has a contracted capacity of 932 MW (effective contracted capacity

676 MW, excluding TPC–G Unit 6 which is based on mixed fuel and is under

economic shut down) with the embedded generation of TPC-G. The Unit-wise

contracted capacity is as follows:

Sr. No Source Capacity (MW) BEST’s Contracted

Capacity (MW)

1 TPC-G Hydro 447 228

2 TPC-G Unit-5 500 256

3 TPC-G Unit-6* 500 -*

4 TPC-G Unit-7 180 92

5 TPC-G Unit-8 250 100

Total 1877 676

*TPC-G Unit 6 is under economic shut down.

9.6. In the contracted quantum with BEST, 228 MW is Hydro power (cheapest source)

which can easily be accommodated in the absence of BEST contract. Hence, only the

remaining 448 MW is for consideration for transmission of power from outside to the

Mumbai area as far as transmission constraints are concerned.


9.7. Hence, MSEDCL reaffirms that there is no constraint in transmission of power from

outside to Mumbai Licensees’ area upto about 1000 - 1200 MW on the basis of the

above realistic data.

9.8. CEA has furnished System Studies of the Mumbai Transmission System based on

data provided by the Mumbai Transmission Utilities and STU with current and future

transmission planning for the Mumbai Area. In its report, CEA has studied four

scenarios on PSS software considering the peak demand conditions for FY 2021-22

projected, with 4.5% growth over the peak demand observed on 01.06.2017:

i. With all planned augmentation and with full embedded generation.

ii. With all planned augmentation and without embedded generation.

iii. Without Vikhroli Substation and with full embedded generation.

iv. Without Vikhroli Substation and without embedded generation.

9.9. All these four scenarios are completely hypothetical, and only the extreme worst case

scenario has been taken instead of the realistic scenario. In the study, scenarios 2 and

4 are for zero embedded thermal generation. However, the realistic scenario in

consideration of 750 MW or 448 MW power flow from outside the Mumbai

Licensees’ area is not at all considered. This does not give clear picture regarding the

transmission loadings in case of power procurement by BEST from outside Mumbai.

This is very preliminary study and not the final report. CEA has sought the comments

of the Maharashtra Distribution and Transmission Utilities for further study and

finalization, at the meeting on 13.10.2017.

9.10. On the basis of this preliminary study, TPC-G is trying to build a larger scenario by

linking the whole Western Region with the smaller quantum of power. It is trying to

take shelter of the unrealistic case study to highlight the transmission constraints and

flaws only with the motive to stall the BEST bidding process by creating fear

psychosis.

9.11. The contention of TPC-G is intended to take undue benefit for supply of its costly

power to the Mumbai Licensees, specifically to BEST, with the fear of non-

competitiveness in the bidding process.

9.12. If such supply to BEST through embedded generation (without competitive bidding)

is allowed, the consumers of BEST and thereby the State will be burdened unduly in

their tariffs due to the costly power of TPC-G. Hence, the Commission may not

entertain this in the interest of the consumers.

9.13. The study with regard to reactive power management and Islanding Scheme (upto

Navi Mumbai and other areas near Mumbai) of the transmission system and

transmission network planning is essential for the long term stability of the power


system, and MSEDCL agrees with the contention of TPC-G. However, this study has

no concern with the present medium term power procurement having an effective

quantum of 448 MW.

9.14. The Petition filed by TPC-G for suspending the competitive bidding process initiated

by BEST may be dismissed.

10. At the hearing held on 27.10.2017:

10.1. TPC-G and TPC-D stated that they had filed their respective Petitions to raise

concerns on various issues regarding transmission constraints and the withdrawal of

embedded generation arising from the proposed medium-term procurement of 750

MW power through competitive bidding by BEST, and their consequences for TPC-

G, TPC-D and other Mumbai Distribution Licensees. In their submissions during the

proceedings of Case No. 25 of 2017, the STU and MSLDC had also stated that

embedded generation can be removed only in phases, and that power procurement

from outside Mumbai is presently possible only to the extent of 300 and not 750 MW.

10.2. TPC-G stated that it had received a letter from BEST stating that the PPA period may

have to be extended in case of delay in finalising the competitive bidding process,

considering its first right of refusal. The Commission observed that the issue was not

before the Commission in these proceedings. To a query of the Commission, TPC-G

stated that it was not averse to participating in the competitive bidding process of

BEST.

10.3. TPC-D stated that it has concerns regarding the extent of its own allocation and

availability of Long-Term Open Access capacity, considering the transmission

constraints, if BEST brings the proposed power quantum from outside.

10.4. According to TPC-D, it would also have to bear certain additional costs from such

import of power. The Commission observed that, on this logic, nowhere should any

new load be connected because the back-end losses of TPC-D would increase.

10.5. The Commission observed that, in its Order in Case No. 25 of 2017, it had dealt

extensively with the issue of the transmission capacity available, on which it had also

considered the similar submissions that were made in those proceedings. The

Commission had also expressed its grave concern and dissatisfaction on the slow

progress of the key Mumbai transmission projects, with which TPC (Transmission) is

concerned.

10.6. The Commission pointed out that the Order provides that the final decision on the

outcome of the competitive bidding process would be taken considering, among other

things, the locations of the generation sources of the successful bidders in the context

of the transmission capacity available, after consultation by BEST with the STU and


MSLDC. That being the case, the Commission observed that it could not understand

the purpose of these Petitions. They appear, in effect, to be in the nature of appeals or

for review of the Order in Case No. 25 of 2017.

11. In its undated letter received on 30.10.2017 referring to the hearing, the Maharashtra

Chamber of Commerce, Industry & Agriculture (MCCIA), an authorised Consumer

Representative, while commending BEST for its initiative and the Commission for its

support, suggested that BEST be asked to first procure power from nearby Generating

Stations and thereafter from other sources for any shortfall, considering the optimal

utilisation of the existing transmission corridor and its capacity, and the transmission

losses from importing power.

Commission’s Analysis and Rulings

12. TPC-G (in Case No. 148 of 2017) and TPC-D (in Case No. 150 of 2017) seek the

suspension or postponement of the competitive bidding process being

undertaken by BEST in pursuance of the Commission’s Order in Case No. 25 of

2017 until the transmission constraints and the implications of importing power

into Mumbai are reconsidered. While TPC-G has also referred to the draft of the

preliminary report of the CEA received after the Order in that Case, the

Commission notes that the issues now raised by TPC-G and TPC-D in these

Petitions are substantively the same as had been raised in the proceedings of

Case No. 25 of 2017.

13. The issue of transmission constraints was deliberated at length during the

proceedings of Case No. 25 of 2017, and the STU and MSLDC assessments were

also discussed. Considering the submissions in that Case, the Commission ruled

as follows in its Order dated 23.9.2017:

“42.12 In the light of the above discussion, the Commission is of the view that,

at this stage, it would be premature to presume which of the various

eventualities might materialise and to restrict BEST on that basis from

proceeding with medium-term competitive bidding for procurement of 750

MW power, particularly when it is for the first time that any Distribution

Licensee in Mumbai has sought to procure substantial power for the medium-

term through competitive bidding. The Authorised Consumer Representatives,

Prayas and TBIA, who participated in these proceedings have also welcomed

BEST’s proposal to procure power through competitive bidding.

42.13 The Commission accordingly approves BEST’s proposal to undertake

medium-term competitive bidding for procurement of 750 MW power for 3

time slots for 5 years from FY 2018-19, in accordance with the Competitive

Bidding Guidelines, under Section 63 of the EA, 2003. However, as discussed

while analysing the load curves of BEST, the time slot for procurement of 250

MW power (Peak Load II) shall be from 0900 hours to 1900 hours instead of

upto 1700 hours proposed by BEST. BEST shall undertake this power


procurement through three separate but simultaneous bidding processes for

the following:

(i) 300 MW Round the Clock;

(ii) 200 MW from 0700 hours to 2400 hours, and

(iii) 250 MW from 0900 hours to 1900 hours.

42.14 BEST shall approach the STU and the MSLDC for their concurrence

upon conclusion of these three competitive bidding processes and before

issuing Letters of Award (LoAs) for the supply of power or signing PPAs with

the successful bidders.

42.15 The STU and MSLDC shall examine the location of the successful

bidders in the three competitive bidding processes, and jointly assess whether

BEST can avail power from them or if there are any issues in sourcing power

from one or more of them.

42.16 In case there is any issue due to which BEST is unable to procure the

entire 750 MW power through competitive bidding considering the assessment

of the STU and MSLDC, BEST may approach the Commission through a

Petition to address those issues considering the STU and MSLDC’s views. The

Commission would take an appropriate view in the matter at that stage.

42.17 BEST must ensure that the process of obtaining the concurrence of

the STU and MSLDC and the filing of its Petition on any issues arising is

undertaken expeditiously so that the process is completed and LoAs are

issued to the successful bidders well within the Bid Validity Period as per the

Model RfP set out in the Competitive Bidding Guidelines for medium-term

procurement.

42.18 BEST shall also file a separate Petition within the stipulated period for

adoption of the tariff discovered through the medium-term competitive

bidding process in accordance with Section 63 of the EA, 2003 and the

Competitive Bidding Guidelines, and for approval of the PPAs entered into

with the successful bidders.”

14. Thus, in its Order in Case No. 25 of 2017, the Commission had dealt extensively

with the issue of the transmission capacity available and its implications for the

procurement of power proposed by BEST. It had also considered the

submissions made in those proceedings, which were similar to those which are

being reiterated now. The Commission had made it clear that, in the context of

these and other considerations, a final decision would be taken depending on the

outcome of the competitive bidding process and the locations of the generation

sources of the successful bidders, after consultation by BEST with the STU and

MSLDC. At that stage, when the options available would be crystallised, TPC

and the other Distribution Licensees and the Consumer Representatives would

have the opportunity to raise their concerns and issues, if any.


15. However, TPC-G and TPC-D have nevertheless filed these Petitions inspite of the

clear dispensation in the Order in Case No. 25 of 2017 and without waiting for

that stage to be reached. The competitive bidding process being undertaken by

BEST in pursuance of its Order cannot be allowed to be pre-empted in this

manner, and the present Petitions are premature.

16. In view of the foregoing, these Petitions are dismissed.

The Petitions of Tata Power Co. Ltd. (Generation) in Case No. 148 of 2017 and of Tata

Power Co. Ltd. (Distribution) in Case No. 150 of 2017 stand disposed of accordingly.

Sd/- Sd/- Sd/-

(Deepak Lad)

Member

(Azeez M. Khan)

Member

(Anand B. Kulkarni)

Chairperson