In a major setback to the monopoly of Grid Corporation of Orissa (Gridco) in power purchase business, the Orissa Electricity Regulatory Commission (OERC) has directed the state-run bulk power purchaser to pay higher tariff for the power it bought from Arati Steels Ltd (ASL) during 2010-11.
“We direct Gridco to make payment of Rs 3.02 per Kwh (unit) to M/s ASL towards the earlier purchase of power till date. We further direct that any further purchase of such power by Gridco from M/s ASL will be governed by the National Tariff Policy and associated guidelines for the procurement of power,” the power regulator said in its order.
In a petition filed before OERC, ASL had sought to sell 88 per cent of the power generated from its 50Mw power plant to Gridco at Rs 4.31 per unit. The petition pointed out that though Gridco had initially agreed to pay Rs 3.77 per unit, it later settled the bills at Rs 2.43 per unit.
For the non-compliance of its payment agreement, Gridco argued that it was buying surplus power from captive generation plants (CGP) at a rate of Rs 2.75 per unit and hence Rs 3.77 per unit would have been much higher than the market price.
The regulator observed that Gridco bought power from National Thermal Power Corporation (NTPC) during 2010-11 at a rate of Rs 3.02 per unit excluding transmission loss and ordered that the same price be paid to Aarti Steels.
As per the MoU signed between the state government and Aarti Steels, the later was to sell 12 per cent of the power generated by it to the state government at a variable rate. The remaining 88 per cent of power was to be sold either to the state government or any third party at a mutually agreeable rate.
But Gridco, after taking its mandatory 12 per cent power from ASL, was forcing the company to sell the remaining power at a price unilaterally decided by it. The steel making unit was even denied open access to sell power to a third party outside Orissa.
“Now a situation has been created in which power is generated and is taken by Gridco for consumption in the state, but the purchaser does not agree to pay even the provisional negotiated price for 88 per cent of the power generated and at the same time hurdles are being created in granting open access. This is not a desirable situation for the growth of the power industry in Orissa,” the order said.
The OERC directed that in case Gridco does not buy the balance power generated by Aart Steels, then the later may be allowed open access to sell the power to a third party.
