Fight of Common Man - For his Right towards Affordable Electricity “My Home India – An NGO” Parag Deodhar

confidential 2 My Home India An NGO working towards strengthening the eternal bond of fraternity between North East India and the rest of the country.  Electricity A Bare Necessity in today’s Environment  Lots of News pertaining to Power Issue in Mumbai  Common People are facing huge tariff shocks every passing Year  Corporates are enjoying Monopoly in generating and distribution segment of Electricity business

Who serves Common Man…..? It is clear that Common Man is only served by Reliance and BEST 10 L consumers 3 L Cross Subsidised Consumers 28 L consumers 24 L Cross Subsidised Consumers 0.5 L consumers 0.25 L Cross Subsidised Consumers

confidential 4 Power Scenario in Mumbai…. Unfolding of the Story  Tata Power was bulk supplier of electricity in Mumbai since last 80years  Major power requirement of Mumbai city catered by Tata Power and it continued even after enactment of E. A  Power was supplied to all distributing licensees in Mumbai at Regulated rates only.  No Power Purchase Agreement ( whether short term or long term ) was required till 2005 MERC’ order.  Common man as consumer in Mumbai always enjoyed reliable and uninterrupted power supply at affordable tariff.  Creating a healthy and win-win situation for all concerns and parties.  This scenario continued till End of a Happy Era

confidential 5 Changing Mumbai into Battleground...What happened in 2006?  Tata Power decided to allocate Power (higher quantum) to BEST and their own distribution arm with no regards to Suburban consumers requirement.  MERC regulatory body decides to remain a mere spectator.  In a power deficit Mumbai one company had huge deficit of Power allocation and other two Companies have surplus power  Obviously huge tariff increase to Suburban consumers and the fight for power reaches Supreme Court

confidential 6 Competition ???  In 2008 Hon’ble Supreme Court clarified that TPC could supply to retail customers.  Immediately Tatas gave a roll out plan for laying their network in areas primarily in Suburbs & that too near commercial establishments… Why so… MERC didn’t ask?  Luckily MERC directed Tatas to use existing licensee’s network by paying wheeling charge but choose to keep Cross Subsidy Surcharge for some other day  It was immediately observed that there was smooth migration of customers in suburb for industrial and commercial categories…. Tata’s Marketing Team at work  Residential consumer migration was discouraged on various grounds… No need to give evidences towards this… It was done purposefully at the counters  Airport gets migrated on first day… How come ? Was Tata talking them earlier?  Residential Consumers did not migrate as no substantial benefit was offered to them…. Why?. Tata was working for Malls, Airports all these days? But MERC too was ignoring this? Why?  Also migration is happening only in area of one Distribution licensee ( Suburb )…. Why so… MERC should ask ? MERC aiding Tatas in “Cherry Picking”

confidential 7 Competition gave following Statistics  40,000 consumers have migrated from Reliance to TPC during last 6 month  1200 Million Units are Migrated but from where? Cross subsiding  90% Cross Subsidized ( Common Man)  10% Only Big Fishes Jumped Out…….. Small One remain in the same Pond Sir… I am sure this is not the type of Competition you had thought of

confidential 8 Competition should benefit Common Man….. All sitting in this room will definitely agree on this

confidential 9 We know MERC is committed to control Tariffs for Common Man in Mumbai- What they can do in Current Situation?  In Changeover Process …. Balance Cross Subsidy Introduce Cross Subsidy Surcharge on Commercial Consumers migrating to Lower Tariff option  Mumbai Power to remain in Mumbai only. Surplus power to be offered within Mumbai city at Average cost of power.  Implement Uniform Retail Tariff for Mumbai city which is expected to give relief to 98% of Mumbai Consumers.

confidential 10 Uniform Retail Tariff  Mumbai – only city in India where in differential treatment in terms of tariff is given to consumers having same category in the same city.  Since last 7 years URT is successfully implemented in Delhi entire distribution area irrespective of Distribution Company.  Uniform Retail Tariff will create a perfect platform for service based competition.  All the customers will have choice to select the service provider based on quality of delivery.

confidential 11 Thank you