The Orissa Electricity Regulatory Commission has directed Vedanta Aluminium to pay R15 crore to Wesco, the Reliance Infra-owned and licensed distribution company, for “illegally” sourcing power from group company Sterlite Energy.
Vedanta Aluminium?s aluminium manufacturing unit at Jharsuguda in Orissa, which has been notified as a SEZ, was sourcing power directly form Sterlite Energy?s Independent Power Plant (IPP) located next to the SEZ through a dedicated 400 KV double circuit transmission line.
According to OERC, Sterlite Energy directly supplied power to Vedanta Aluminium instead of supplying power to bulk supplier Gridco, who would have suppled to Wesco through transmission lines laid by the Orissa Power Transmission Corporation (OPTCL). It used its own 400 KV line, which actually should have been OPTCL’s business, said OERC.
The Electricty Act of 2003 allows an entity to source power directly from a generating unit but it has to pay a cross-subsidy surcharge on the quantum of power availed of, something which Vedanta failed to pay. The case was first brought to OERC’s notice by Wesco in 2011, and the OERC delivered its final judgment last week.
Prior to the order, Vedanta appeared before the commission with two applications seeking approval for a power purchase agreement between Vedanta Aluminium and Sterlite Energy’s IPP, and licence for Vedanta Aluminium to carry out power distribution inside the SEZ area. Vedanta claimed that the SEZ notification had given the promoter the deemed licence to distribute power.
?So, according distribution licensee by the OERC is only a formality,? it said.
The three-member commission, comprising chairman SP Nanda, members BK Mishra and SP Swain, rejected the applications of Vedanta and directed the company to pay the cross subsidy surcharge to Wesco.