The Damodar Valley Corporation (DVC) will stop supplying power to CESC Ltd from April 1 onwards under orders from the West Bengal government.
CESC has sought permission from the government to continue importing about 50 mw of power from DVC or else large parts of the industrial belt on the western bank of the river Hooghly will face a blackout.
The RPG-owned power utility needs at least 30 months to set up necessary facilities to replace the current DVC infrastructure if it has to maintain supplies. In the absence of power from DVC, CESC will have to depend either on its own generation or import from the West Bengal State Electricity Board (WBSEB).
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The state government has to give special permission to DVC to supply power within the state as Calcutta is located about 100 km outside the boundaries of the Damodar Valley.
DVC had begun supplying power to CESC on July 9, 1957, when it was flush with surplus capacity and Calcutta needed more power. The supply began at the rate of 60 mega volt ampere (mva) and was gradually raised to 105 mva over the next five years.
On an average, DVC supplied over two million units per day over the last four decades.
This was first slashed to 75 mva under the orders of the state government from January, 1997 and to 50 mva from February 1 this year.
The state government has made it clear to DVC that the permission to supply power to CESC will expire at the midnight of March 31.
The state governments order, however, was not unexpected. With the commissioning of CESCs Budgebudge thermal power project, the company has reduced its power imports from WBSEB.
The state government is trying to compensate WBSEB for this loss by handing over to it DVCs share.
CESC was keen that the import from DVC be maintained at the 50 mva level till May next, by which time its first 250 mw unit at Budgebudge would have stabilised. This was not agreed to by the state government.
But, the real problem is not the alternate source of power. CESC does not have the necessary infrastructure to feed power in wide Howrah areas till alternative facilities are built.
It had proposed to take over DVCs facilities at Howrah. But, DVC refused to even discuss the proposal as it is determined to maintain the facility in the interest of stability of its own transmission ring.
CESC is hopeful that the state government will realise the impossibility of an immediate end to DVC supply. Besides the time factor, the cash-strapped company needs to invest at least Rs 30 crore to build up necessary infrastructure.