On Friday, Tata Power announced that they have received the letter of intent (LOI) from the Odisha Electricity Regulatory Commission (OERC ). This LOI gives them control over the power distributors Westco and Southco for the next 25 years. These two distributors are mainly responsible for retail power supply in western and southern Odisha.
Tata Power also won the distribution license for another Odisha discom CESU last December. It also happens to be the sole bidder for Odisha’s remaining discom, Nesco. This will give Tata Power a 51 percent stake in the discoms while the Odisha government has a 49 percent stake. During the fiscal year 19, these four Odisha discoms garnered a total loss of Rs, 1,539 crores. Of these, Nesco had losses of Rs. 2 crores.
Moreover, Tata Power has vowed to make a capital expenditure of Rs. 2,830 crores cumulatively. They plan to attain this goal cumulatively between FY22 and FY26 on Wesco and Southco discoms.
Tata Power is also moving forward to reduce the aggregate technical and commercial (AT&C) losses of Southco in 10 years. Their current level is 35.3 percent and they plan to reduce it to 14.8 percent. AT&C losses for Wesco were targeted to cut from 27.6 percent to 9.1 percent during the same period.
Tata Power reduced AT&C losses from 53 percent to 8 percent in Delhi
Furthermore, Tata Power has a similar public-private partnership model in Delhi with the government. It managed to reduce AT&C losses from a peak of 53 percent in 2002 to 8 percent currently.
While talking to investors about Nesco, Praveer Sinha said, “the regulator and the government are taking a view on whether they would give it to us based on our offer or there is going to be a rebid”. Sinha is the CEO & MD of Tata Power. The company is also the sole bidder for Nesco.
Tata Power’s five-year planning will have Discom playing a huge part. Discom business is anticipating its consumer base to rise to 20 million from the present 2.6 million subscribers. The company is hopeful about the growing opportunities in discom privatization. They are aiming to collect revenue of Rs. 27,000 crores from transmission and distribution business by FY25.
