Reliance Eyeing Power Line To Delhis VIP Area

New Delhi, Aug 24 | Updated: Aug 25 2004, 05:56am hrs
Reliance Energy is eyeing a piece of the countrys Power Zone Number 1. The company has sought a licence to distribute electricity to the New Delhi Municipal Council (NDMC) area in the Capital. A large part of Lutyenss Delhi lies in the NDMC area, where Indias political elite lives and works.

In a letter to the ministries of defence and power, Reliance has sought a no objection certificate (NoC) to supply power in the NDMC area using its own distribution network.

The move rides on Reliances forthcoming power generation plans for the national Capital region market through a gas-based 3,000-MW plant in Dadri, Uttar Pradesh.

Reliance has already applied for a licence with the Delhi Electricity Regulatory Commission (DERC).

The move marks the emergence of a second player in the distribution business. With the open access provisions in the Electricity Act, 2003, big cities in India are expected to see two, if not more, distribution networks for power supplies in the same area. There is, however, a 5-year time frame for open access in distribution to become mandatory. In the absence of any policy guidelines on open access in distribution, private players like Reliance Energy and Tata Power are opting to lay parallel networks instead.

Both companies have already applied for electricity distribution licences in cities like Pune, Nasik, Aurangabad and Nagpur, by putting up parallel distribution networks.

Some municipality areas are being targeted too. Reliance has applied for a distribution license in the BEST areas in Maharashtra.

Section 14 of the Electricity Act allows for grant of license to two or more persons for distribution of electricity through their own system within the same area. However, for distribution of power in municipalities, open access is not avaialable and the supplier has to essentially lay his own network.

In a recent letter to Reliance Energy, DERC has informed that it will hold a hearing in this regard on September 9. Notices have been served to all government parties including the ministries of home affairs, power, defence, DDA, NDMC, the government of Delhi and Delhi Transco to appear before the regulator.

There are divergent views on having parallel distribution networks with multiple wires than having open access distribution system with one set of wire. The world over, creating parallel distribution networks is considered to be a wasteful expenditure. But in India many feel that open access in distribution is not possible.

NCAERs Gajendra Haldea, the initial author of the Electricity Bill, disagrees. He fears that duplication of networks will ultimately penalise the end-consumer who will have to bear the cost. The optimum way to benefit the consumer and the economy is to create competition through a single network (to be used as a common carrier) by providing open access rather than creating multiple networks without open access, Mr Haldea said.