The state electricity board recently raised the stand-by charges payable by Tata Electric by Rs 66 crore to Rs 363 crore for the 500mva applicable from December 1. According to official sources, Tata Electric cannot recover the amount by hiking the tariff. The state electricity board has to either let go of this additional amount or BSES, which has a similar arrangement with Tata Electric, must share the burden, they said.

Tata Electric has proposed an annual increase in the stand-by charges for BSES to Rs 181.5 crore from the current Rs 42 crore. It has also hiked the demand charges to Rs 200/kva a month from Rs 170. In the line of the state electricity board's notice to Tata Electric, the revised charges of BSES would be applicable from December, this year.

While BSES believes that the increase isnot justified as it reached an agreement with Tata Electric on these issues just eight months ago, TEC, citing the government of Maharashtra's order, argues that the then fixed Rs 3.5 crore/month charges were subject to review.

"BSES's stand-by charges should correspond to state electricity board's charges payable by Tata Electric for the similar facility," sources said, arguing that if Tata Electric should pay Rs 363 crore for 500 mva, BSES should cough up at least half of this for the 275 mva stand-by facility.

Meanwhile, the two power companies also have an on-going dispute on the distribution areas and type of consumers. According to the Tata Electric licence, the company is authorised to supply power to consumers, who require 1,000 kva in the area of BSES.

BSES had been supplying power to some of these buyers for years. These consumers are now being wooed by Tata Electric. Recently, Tata Electric, which is offering power to these bulk consumers at a lower rate than BSES, has clinched two of thelatter's consumers - Ambassador Sky Sheaf at Sahar and Shakti Insulated Wires - at Borivali.

However, ICICI which used to buy power from Tata Electric has shifted loyalties to BSES at its Bandra-Kurla office in the city's western suburb.

BSES, which has been protesting against the hike in stand-by charges, also argues that it cannot recover this from its consumers. The company already charges a higher tariff from its industrial users to subsidise the domestic category which forms 51 per cent of its consumer base, said company officials. BSES, incedentally, has recently announced a reduction in its industrial tariff by 50 paise per unit to retain its bulk consumers.