Even as power firms are vying for access to the inter-state transmission corridor to supply power to southern states, a recent decision by the Union power ministry has left part of the already-choked network out of bounds for them.
This is because of a Union power ministry decision to extend Aravali Power Company’s (APCL) access to the grid for another one year, starting this April, which led to the Central Electricity Regulatory Commission (CERC) to virtually freeze use of part of the grid capacity till complaints lodged by three other companies are disposed of.
Equipped with power purchase agreements with Tamil Nadu discoms, Balco, Jindal Power and KSK Mahanadi had applied for long-term (15-year) access to the grid in November 2013 to supply 1,000 MW of power to them. But APCL, which was allocated the grid capacity in March last year, has been allowed by state-run Power Grid use of the facility for another one year, thanks to the ministry’s directive.
When the three companies termed the move as unilateral, the CERC stepped in, and asked Power Grid not to put to use the part of the grid capacity till the issue is resolved by the regulator.
APCL was allocated the grid capacity to evacuate 695 MW rendered surplus after the Delhi government refused to buy power from the plant citing high cost (R5.35/unit). The facility was meant to last only a year, but the Power Grid extended it for another year (till March 2016), a move termed unilateral by the three firms that had applied for LTAs, given their power purchase agreements (PPAs) with Tamil Nadu.
The CERC has said Power Grid’s decision was “to the serve prejudice of” firms waiting for the allotment of the corridor for transfer of power. The regulator also asked the central transmission utility to maintain status quo on “operationalisation of allocation of power by ministry of power” till the matter is decided.
This means that part of grid capacity is rendered unusable till the regulatory decision is pronounced.
Responding to KSK Mahanadi’s plea, the CERC has said: “The entire process (is) contrary to the specific findings, decisions and directions of this Commission.”
The extra APCL power went to three southern states Andhra Pradesh, Telengana and Kerala. APCPL is a joint venture, with NTPC holding a majority stake of 50% and Delhi and Haryana governments being the other stake-holders.
The TN discoms would now have to continue to meet their power requirement by short-term (more expensive) power purchase.
“The government’s decision seems to be guided by the interest of NTPC, which would be saddled with a stranded plant if there was no extension in allocation,” an industry expert told FE on the condition of anonymity.
Before the power ministry extended Aravali Power’s tenure for power supply, Power Grid had proposed to grant LTAs (starting June 2015) to Balco for 100 MW, Jindal Power for 400 MW and KSK Mahanadi for 500 MW. The proposal was made redundant by the extension given to Aravali and a fresh course of action will now be based on CERC’s decision. Apart from the LTA applications, a clutch of medium-term (three months to three years) open access applications are also pending with the state-run transmission utility.