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ALL INDIA INSTALLED CAPACITY

ALL INDIA INSTALLED CAPACITY

Monday, November 14, 2011

Essar moves SC over transmission charges

Essar Power (EPL) has moved the Supreme Court seeking to set aside the demand of around R400 crore raised by Gujarat Energy Transmission Corporation (GETCO) for transmission and wheeling of electricity from Essar Steel’s (ESL) captive power plants to its steel and power plants.

The issue before the court relates to the ownership of a bus-bar (a part of electrical installations), which is a 400-metre line connected to a 220 kv transmission line leading to GETCO’s Ichhapur and Sachin substations. The petitions filed by both ESL and EPL will come up for hearing in December.

Challenging the legality and validity of the demand raised by Dakshin Gujarat Vj Company and GETCO, Essar said the Gujarat High Court was not right in holding that ESL and EPL were not transmission licensees and were not authorised to build, maintain and operate intra-state transmission system and the self installed bus-bars. It further said that bus-bars, installed by Essar at its own cost, had become an integral part of 220 kv transmission lines and the ownership of this vested in DGCL because the ownership of service lines was that of erstwhile Gujarat Electricity Board (GEB).

GETCO had demanded transmission charges in lieu of wheeling charges, which according to sources are around R400 crore, on the ground that a transmission system belonging to it had been used by Essar for conveyance of electricity. This was challenged by Essar before the high court.

The high court had further held that GETCO had the authority under the rules and the regulations to determine the tariff for supply of electricity by a generating company to a distribution licensee for transmission and wheeling of electricity. Wheeling means an operation whereby the distribution system and other facilities are used for conveyance of electricity on payment of charge.

Alleging deprivation of its property by the transmission companies, Essar said that the high court was not justified in holding that the company was divested of its ownership rights to a part of its own electrical installation and that the same stood transferred to and vested in the licensee without a single clause supporting the same in the agreement for supply of electricity to it.

It said that such “purported vesting” was only for the limited use by the erstwhile GEB for supply of electricity to other consumers and could not authorise or entitle the board to claim full ownership rights and levy wheeling/transmission charges for use of the same by ESL or EPL.

The power company argued that bus bars could not be considered as service lines and such charges were unsustainable as the supply of electricity was not from a generating company but from the captive power plants to ESL itself. The state board before the high court had argued that the transmission/wheeling charges are leviable in respect of transmission and wheeling ofelectricity through the Bus Bar from 34mw and 155 mw captive power plants of ESL to the units of the ESL.

While erstwhile GEB had in 2001 constructed and commissioned another 220 kv transmission lines at ESL’s power plant at its cost, the Bus Bar was constructed by ESL at its own cost of R54 crore, which allegedly is an integral part of its switchyard and entirely beyond the metering points of GEB.

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