Task force to study breakup of Power Grid functions

System operation proposed to be separated from Transmission

The Power Ministry is considering setting up of a task force to study hiving off Power Grid Corporation India Ltd's (PGCIL) system operation functions from its transmission functions.

PGCIL currently handles not only transmission of power, but also the Regional Load Dispatch Centres, which are responsible for operation and control of the bulk power system.

"The task force would study the international experience "" in places like America, Europe and South Africa, which have independent system operators and would also go into the question of whether the entity should be a corporation or an authority," said an official in the Power Ministry.

The Electricity Act has left the hiving off of these two operations open-ended. However, there is a view that in order to ensure true competition, there should be an independent system operator (ISO). Currently, the five RLDCs are controlled by PGCIL, the Central Transmission Utility.

With private players allowed to lay transmission lines, PGCILs position as operator of the load dispatch centres and owner of transmission lines gives it an unfair advantage, say analysts.

"Power Grid is opposed to the idea of separation of these two functions. Internationally, very few countries have hived off the two, most transmission utilities also handle the systems operations," said a senior official from PGCIL.

Analysts however argue that real competition would not be possible without an ISO, which is generally an independent, non-profit entity under the control of a board which could consist of market participants and the general public, overseen by regulators.

An ISO could own grid assets as long as it remains unaffiliated with the market participants, like it is in the UK, Spain and Scandinavia.

Separation of the system operator from the ownership of the transmission, as has been proposed in India, has been adopted in Argentina and most of Australia.

In the US, ISOs operate in California and New York among other places, but the transmission ownership in each of these regions remains with the old utilities, so transmission ownership is fragmented.

Power Grid is responsible for all the transmission projects in the central sector and also for the formation of the National Power Grid.

It was established in October 23, 1989 with the mandate to establish and operate Regional and National Power Grids to facilitate transfer of power within and across the Regions on sound commercial principles.

Creating separate platforms

• Power Grid currently handles not only transmission of power, but also the Regional Load Dispatch Centres
• The task force would study the set up in places like USA and Europe, which have independent system operators
• The panel would also go into the question of whether the entity should be a corporation or an authority
• Currently, the five RLDCs are controlled by PGC, the Central Transmission Utility
• With private players allowed to lay transmission lines, PGCs position as operator of the load dispatch centres and owner of transmission lines gives it an unfair advantage