No premium on 'exported' power

In a judgement that will bring relief to power deficit states, the Appellate Tribunal for Electricity has disallowed power surplus states like Orissa from charging a premium on exported power.

The tribunal was hearing an appeal against Orissa's "deemed power trader" Grid Corporation of Orissa (Gridco), which buys power from generators in the state at an average cost of Rs 1.10 per kwh and sells the surplus power to power trader PTC at Rs 4.61-4.81 per kwh.

This sale was outside the regulatory ambit since it was masked as an intra-state sale. PTC then "exports" power from the state at a capped margin of 4 paise per kwh.

Setting aside the earlier order of the Central Electricity Regulatory Commission, the tribunal said, "Gridco was entitled to charge only the trading margin (of 4 paise) over the average cost of procurement of electricity for the surplus power sold to PTC... Electricity traders cannot be allowed to exploit the shortage of electricity in the country."

In its judgement delivered on Thursday, it has asked the Central Electricity Regulatory Commission to work out a mechanism to refund the excess amount charged by Gridco to consumers. Industry observers said this amount could be as much as Rs 1,000 crore.

"Selling electricity at high rates outside the state is neither in the interests of the residents of the state nor in the interests of the consumers of the rest of the country," the tribunal said in a 60-page judgement, which will extend to all other similar cases.

Planning Commission member Gajendra Haldea was the appellant, in his personal capacity, and was supported by aggrieved parties Uttar Pradesh Power Corporation and Maharashtra State Electricity Distribution Company

Experts tracking the case expect an appeal to be filed in the Supreme Court shortly.

Saying that such transactions negate the spirit of the Electricity Act of 2003, the Tribunal added that "The tendency of making unregulated profits at the cost of consumers is required to be curbed.... In case they are allowed to indulge in such activities, it will have an adverse effect on the economy of the country".