The Hindu Business Line : SEBs stymie open access

Power woes
Private power projects as well as captive units are also being actively discouraged from selling surplus electricity to the grid despite widespread power shortages.
The Gujarat State Electricity Board has come in for flak for the "unfavourable policies" adopted by the board against export of captive power.

New Delhi , June 10

Faced with the prospect of competition for the first time, State electricity boards, backed by their respective Governments, seem to be in no mood to give up their monopolistic position and are raising a bevy of protectionist barriers to stymie the implementation of key reform provisions promised in the Electricity Act 2003.

A good three years after the enactment of the path-breaking legislation, several States are still resistant to measures such as open access that enables consumers to migrate to suppliers of their choice.

Private power projects as well as captive units are also being actively discouraged from selling surplus electricity to the grid despite widespread power shortages affecting much of the country, according to findings submitted to the Government by a team comprising Central Electricity Authority (CEA) officials and industry chamber representatives.

For instance, when the Jharkhand State Regulatory Commission passed an order allowing Tata Steel-subsidiary Jamshedpur Utility and Services Company Ltd to wheel 8-10 MW surplus power from its captive unit to another plant, the Jharkhand State Electricity Board appealed against the move and took the matter to the High Court to scuttle the regulator's order. State-owned Damodar Valley Corporation (DVC) refused its consent to SAIL-subsidiary Durgapur Steel Plant's proposal for wheeling of surplus power using DVC's transmission network; instead it directed the company to lay separate lines for selling of power.

This, despite the Electricity Act allowing access to the transmission lines of any utility across the country, subject to the payment of a wheeling fee by the user.

Again, ITC was disallowed to wheel power between its units by West Bengal as the State Government was yet to formulate guidelines for this type of transaction. Haldia Petrochemicals Ltd has been disallowed from wheeling surplus power to other companies interested in purchasing electricity, with the State administration citing capacity constraints in its transmission grid.

The Gujarat State Electricity Board has come in for flak from the steel industry in the State for the "unfavourable policies" adopted by the board against export of captive power to the grid.

While larger firms such as Maruti, Indo Gulf Fertilisers and Reliance Industries Ltd have managed to muscle their way through the SEB barricades to start selling power from their captive projects to the grid, smaller captive unit owners are facing the bulk of the resistance.

Besides operational hurdles, SEBs are also lining up a bevy of duty barriers, including high charges for grid support, taxes on third-party sale and electricity duty structures against the flow of captive power into the grid. For instance, Gujarat and Chhattisgarh impose high parallel operation charges, which acts as a deterrent. In case of Chhattisgarh , the charge was as high as Rs 16 per kVA on the installed capacity of a unit. The State levies a cess of 10 paise on captive generation and there is an electricity duty on captive units as well.

In the Southern region, the Kerala electricity regulator has prescribed a minimum quantum of power at 15 MW for open access benefits, thereby rendering a sizeable number of smaller captive units out of the fray.