Reliance Energy takes on PGCIL

Private power firm files application with CERC for four transmission lines

Reliance Energy has decided to take on Power Grid Corporation of India Ltd. (PGCIL) over its monopoly rights in the transmission business. It has filed an application with the Central Electricity Regulatory Commission (CERC) seeking to set up four transmission lines, totaling around 1,000 km in Maharashtra.

Power Grid, on its part, has invited bids seeking private participation for the four lines, comprising Parli-Aurangabad, Parli-Pune, Pune-Aurangabad and New Parli-Bhadrawati. The public sector proposes to be a minority shareholder in each case and is willing to offer 51 to 74 per cent stake to private players.

Reliance approached the Central Electricity Regulatory Commission on Monday seeking intervention from the regulator.

When contacted, CERC chairman AK Basu confirmed the development. "We have just received the matter and we would look into it," Basu said.

Power Grid chairman and managing director RP Singh refused to comment. "All I can say is that we have invited bids and made our intention clear," he said. Reliance executives said that so far, the regulator is yet to come out with guidelines on setting up 100 per cent transmission facilities in the country, though the Electricity Act, 2003, provides for it. "We hope that our proposal will gravitate the process. Why should Power Grid decide who should enter transmission," a senior company executive said.

Under the earlier dispensation, Power Grid either independently or through a joint venture or an independent power transmission company, shortlisted by Power Grid, could enter the transmission business.

This is the first instance of a private player questioning Power Grid's transmission monopoly through a 100 per cent private sector venture after the Electricity Act, 2003, came into force. The only joint venture approved by the electricity regulator is in Tala (Bhutan), where Power Grid joined hands with Tata Power, which holds 51 per cent stake in Powerlinks.

The only other instance of a private player planning to foray into the transmission business was in case of Kalptaru, which had sought the CERC go-ahead for the Bina-Nagda line.

The regulator had sought comments from Power Grid, the Central transmission utility, to get an idea of the tariff and price quoted by Kalptaru.

PGCIL had come back to CERC saying that it could put up the line at a cost of Rs 557 crore to Rs 617 crore, against Kalptaru's plan to set up the transmission facility for Rs 657 crore. The regulator had then awarded the line to Power Grid and asked it to set up the line at the cost quoted by it.

The transmission utility had subsequently sought a review of the CERC order seeking deletion of the clause pertaining to the cost. The application was, however, turned down by the regulator.