bses limited

8/4/2019 BSES Limited

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BSES Limited73rdAnnual General Meeting (2001-02)BackgroundThe company was formed in October 1929 as a public limited company to acquire and work the existingelectrical undertaking created under the Bombay Suburban Electric License, 1929 (granted to Sir ThomasWilliam Birket Knight and others who were carrying on business in partnership in the name and style ofKillick Nixon & Co. and Callander's Cable & Construction Co. Ltd.). BSES operates under the BombaySuburban Electric License 1926, which is periodically renewed - the present license is valid till 15th Aug2011.

The electric energy distributed by the company to consumers within its licensed area of supply isreceived in bulk from the Tata Electric Companies at the receiving stations of the company. The capacityof the company's distribution transformer substations is 14,96,455 KVA and receiving capacity is 801MVA. The licensed area of supply covers the northern suburbs and outskirts of Bombay from Bandra toBhayandar, Chembur to Trombay and Kurla to Vikroli, encompassing overall area of approximately 384

sq. kilometres. Besides, the company was also engaged in the business of contract work such asinstallation of various electrical and mechanical work through its contracts division set up in 1966.The name of the company was changed to BSES Ltd. from December 1992. The Reliance group took overthe company after being shareholders in it for over a decade and now has over 58 per cent in it. It is beingplanned to rechristen the company to Reliance Energy Ltd. BSES today, is an integrated powergeneration, transmission and distribution company and has the exclusive licence to supply power tosubstantial parts of Bombay, Delhi and Orissa.

GenerationBSES, with no generation stations of its own till FY95, has been purchasing its entire requirement of

power from the bulk licensee, Tata Electric Companies, for distribution in its licensed area of 384sq kmscovering around 75% of Mumbai. The Company services around 1.6 million consumers. Towards end-FY95, BSES commissioned unit I of its 2x250MW thermal power station at Dahanu and thereby became afully integrated power supply company. In FY96, the 2nd unit was commissioned. As a result, BSES isprogressively increasing its own generation and reducing purchases from TECs.BSES today has total generating capacity of 885 megawatts at different plants, of which the Dahanu plantis the largest with 500 megawatts. BSES has also proposed to the Maharashtra government to allow it toset up a 330 MW (to be upgraded to 500 MW) gas-based project at Dahanu, where it operates a 500 MWcoal-based plant.The project costingaround Rs 18-20 billion is yet to get an official clearance.Pursuing the proposed 495 MW naphtha/gas based Combined Cycle power station at Palghar, 610 mw

Patalganga, and 1,082 mw Ispats Bhadravati near Mumbai.

Dahanu Power Station

Power Projects associated with BSES 495 MW naphtha based project near Palghar in Maharashtra.
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160 MW naphtha-based project at Kochi of BSES Kerala Power Ltd. 250 MW lignite-based project at Sirmushnam in Tamil Nadu of Tamil Nadu Industries Captive

Power Co Ltd. 220 MW naphtha based project at Samalkot of BSES Andhra Power Ltd.

Palghar ProjectKeeping in view the problems relating to environmental clearance for expansion of Dahanu PowerStation, BSES have proposed to install a naphtha/gas based combined cycle power station with aninstalled capacity of 495 MW at Palghar, Maharashtra.

Various clearance : Necessary consent of the Maharashtra Pollution Control Board. Irrigation Department has sanctioned water supply from Surya Project for construction work

plant consumption requirement. Various water supply schemes are being discussed. Land acquisition procedures has been initiated with various Government Departments.

Preliminary activities such as soil investigation survey have been started. Bids for main plant supply & erection have been received and technical scrutiny of the bids is

being taken up. Power evacuation studies are in progress.

BSES Kerala Power LimitedBSES Kerala Power Limited (BKPL), a subsidiary of BSES Limited, has a 165 MW naptha based CombinedCycle Power Station at Kochi in Kerala. BKPL is jointly promoted by BSES Limited & Kerala StateIndustrial Development Corporation (KSIDC). A shareholders agreement was signed between the twocompanies with equity participation of BSES Limited as 80% and KSIDC, 20%. The power purchaseagreement (PPA) for the combined cycle operation has been signed between BKPL & KSEB.The project was appraised by Canara Bank. This is the first time that the project is being financed totallyby commercial banks & the first project under competitive bidding to achieve financial closure. Theconsortium of banks led by Canara Bank constitutes Punjab National Bank & National Overseas Bank.Escrow & Disbursement agreement was signed among KSEB & State Bank of Travancore and BSESLimited on 10th July, 1998 as a security package, one of the conditions of PPA. Fuel Supply Agreement hasbeen signed with IOC, for supply of naphtha.Project Status

All three Gas Turbines of 43.5 MW each have started operating on commercial basis, supplying energy toKSEB. The three Gas Turbine Generators and Steam Turbine Generator have been successfully put intooperation and the plant has achieved the milestone of 165 MW in combined cycle on June 5, 2001.

TICAPCO-Srimushnam ProjectTamil Nadu Industries Captive Power Company Ltd. (TICAPCO) was incorporated for implementing alignite based power project at Srimushnam in luddalore District of Tamil Nadu. The Company was
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initially promoted by the local industrialists & their associates for setting up the project as a captivepower station. At the invitation of these, promoters, BSES limited agreed to co-promote the project &subscribed 67% of the equity capital of this Company. Consequently, TICAPCO has become a subsidiaryof BSES Limited with effect from 14th December 1996.

It is proposed to set up 250 MW lignite based power project at the pithead at Srimushram. The power

generated at this station would be supplied to the Tamil Nadu Electricity Board. It is also proposed todevelop a captive mine in order to meet the requirement of lignite for the power station. The Companyhas approached the authorities for raising the capacity to 500 MW (2X 250 MW).

Government order obtained for 280 hectares of land & is being processed by Commissioner ofland Administrative/GOTN. Administrative sanction for acquisition of balance 436 hectares ofland is under process.

Land survey, Soil investigation study & Water feasibility study have been completed at site.Railway feasibility study for Railway siding has been completed.

EPC Contract: Techno commercial bids received, Technical discussions completed. Price bidsare being evaluated.

Major Clearances Obtained:

Revised permission under section 44 of E(S) Act, 1948 issued by TNEB

Approval under section 18A of E(s) Act, 1948 has been obtained from GOTN to establish,operate & maintain 1* 250 MW lignite based Thermal Plant at Srimushnam

GOTN has issued notification under Section 29(2) of Electricity (supply) Act, 1948 forpublication of Project particulars in Tamil Nadu Govt. Gazette.

Environmental clearance for 250 MW from MOE&F, GOI.

Consent for establishment of 250 MW Thermal Plant from Tamil Nadu Pollution ControlBeard (for Water 7 Air Pollution).

Aviation clearance from National Airport Authority for 275m height tall chimney.

Administrative sanction for acquisition of 280 hectares of land.

Sanction by Chief Engineer (Ground Water Dept.), conforming the availability of 8.0MGD ofwater.

Power Purchase Agreement: Discussion are being held with TNEB on the revised PPA & areat a advance stage of finalizing the same.

Techno - economic clearance from CEA: Detail project report incorporating project costdetails & replies to various queries has been submitted to CEA. The same is being isexpedited with CEA.

Captive Mining Project at Srimushnam

Land: Request has sent to the Secretary. Industries Dept. (GOTN) for Administrative Sanction foracquisition of land for Mining Project in south of Vellar Area.

A consultant has been appointed for preparing a Mining Plan, as suggested by Ministry of Coal.The same has been forwarded to Ministry of Coal, GOI. for approval.

Mining Exploration Report: Exploration Report & Geological Report are being obtained fromNLC & MECL, discussions are in progress.


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Mining Consultancy: Consultants has been appointed for carrying out various jobs related toMining letter of Award has been issued to the Consultants.

Joint Venture Partner for Mining: Bids received for Pre - Qualification of Joint Venture Partnerfor Mining Evaluation is under progress.

BSES Andhra Power Limited

The BSES Andhra Power Limited (BAPL) is a joint venture company promoted by Mumbai based leadingpower utility, BSES Limited and by Hyderabad based renowned construction companies viz. SEWConstructions Ltd and Prasad & Company (Project Works) Ltd.The Company is setting up a 220 MW capacity Combined Cycle Power Plant (CCPP) at Samalkot, EastGodavari District, Andhra Pradesh. The power plant site is at a distance of 4 kms from the SamalkotRailway Station and is adjacent to ten metres wide highway connecting Kakinada Port to NationalHighway No.5. Thus the power station is ideally located and is well connected by road as well as by railand is only about 20 kms away from Kakinada Port facilitating convenient importation of Plant andEquipment.The BAPL, Samalkot CCPP will be using Gas as the primary fuel and comprises of one Gas TurbineGenerator set, one Heat Recovery Steam Generator (HRSG) and one Steam Turbine Generator set. ThePower Station when fully commissioned can contribute upto 5 million units of electrical power every day.

The Company has entered into a Power Purchase Agreement with APTRANSCO and the powergenerated by Samalkot CCPP will be evacuated by APTRANSCO through 220 KV transmission lines. Themain equipment for the power station is being supplied by M/s.Ansaldo of Italy and the power station isbeing provided with the State-of-the-art technology to facilitate safe, economic and efficient generation ofelectric power. The power station is being designed to have no adverse effect on the environment of thenearby surroundings.BSES has entered into a Shareholders' Agreement on 24th December, 1997 with the Promoters' Group ofSnehalata Power Ltd (SPL) to subscribe: to 70% of the equity capital of SPL. After acquiring thecontrolling interest in SPL, BSES will implement the proposed 220 MW combined capacity power projectof SPL at Samalkot in Andhra Pradesh. Subsequently the Company has been changed to 'BSES AndhraPower Limited' (BAPL). BAPL has obtained all the clearances and approvals including theenvironmental clearance and the project will be completed in a period of about 18 months. This is the firstPower Project being undertaken in Andhra Pradesh through a joint venture by BSES.

Major Milestones

Incorporated on 1st January, 1996

On the basis of competitive bidding route

2 x 110 MW combined cycle liquid fuel based power project has been awarded.

M/s. SEW Construction & associates are the initial promoters of the project.

Snehalata Power Ltd. and Snehalata Generation Ltd. were incorporated to develop the project.

Rs 1.5 bn bridge loan by BSES Infrastructure FinanceLocation


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Peddapuram, Samalkot in Andhra Pradesh (20 km. from Port)

Adjacent to 4 lane Highway.

Proximity to Railway Line

220 kV Transmission Line passes through the site for evacuation of power.

BPCL Depot under construction, around 20 km. from site.

Water intake from nearby Samalkot Canal - Clearance from Irrigation and CAD dept. on 20thSeptember, 1997.

Power Purchase Agreement has been signed on 31st March, 1997 with APSEB.

Fuel allocation from Ministry of Petroleum vide their letter dated 21st July, 1997.

Fuel Supply Agreement with BPCL on 12th December, 1997.

Amount for land deposited with APIIC for 195 acres of land allotment.

State Govt. guarantee as a Security package dated 17th September, 1997.

Permission from State Govt. to set up Plant under Section 18 (A) - obtained. AP Gazette notification under Section 29 (2,3 & 4) has been published.

Environmental clearance on 3rd July, 1998.

Shareholder Agreement signed with BSES Limited by SPL & SGL on 24th December, 1997.

Being the major promoter and developer of the power project

Equity portion

BSES Limited - 70%

SEW Construction Ltd. - 30%

BSES has entered the company on 7th July, 1998 and gained the controlling stake.

Name of the company has been changed to BSES Andhra Power Ltd.,

On 10th June 1998 - Chief Minister of Andhra Pradesh, Mr. Chandrababu Naidu along withvarious honorable Ministers & dignitaries, laid foundation stone for starting the construction ofthe project.

The main plant contract has been awarded to Ansolda Services, Italy & the balance of the plant toBSES, EPC group, New Delhi (Noida).

The Zero date of the plant commenced from 12 th October 1999.

Project Status

The offshore equipment comprising of Gas Turbine, Steam Turbine and HRSG have arrived atsite.

All the equipment foundations are completed and main plant Civil Works related to Raw WaterStorage Reservoir, Compound Wall, Storm Water Drain, Levelling and Grading of the Plant siteare completed.

The infrastructure facilities like the Approach Road, Construction Power Supply, ConstructionWater Supply, Tele-communication facilities etc. are already in place.


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Work on GTG erection and balance of plant is progressing according to project schedule.

The Open Cycle operations are expected to commence from July 2001 and the Combined Cycle PowerPlant is scheduled to commence commercial operations in January 2002.

The BAPL, Samalkot CCPP will not only help meeting the ever growing power requirement of state of

Andhra Pradesh but also facilitate overall development in general and industrial development inparticular of the surrounding areas.

Maithon Power Limited (MPL) is a Joint Venture Company between Damodar Valley Corporation (DVC)and BSES Limited, to set up Rs 43.67 bn, 4 X 250 MW Coal Based Thermal Power Station on the rightbank of the river Barakar at Maithon. The Project has been named as Maithon Right Bank Thermal PowerStation. Various clearances obtained:

Letter from the Government authorising the company to establish, own & operate generatingpower plant.

Land availability certificate. Water availability certificate. Coal linkage. Environmental clearance from State Pollution Control Board & Ministry of Environment &

Forest, Government of India. Forest clearance from State Forest Department. Stack height clearance from National Airport Authority of India.

In June 2003, BSES announced its decision to exit the power project following Reliance's drive "From thewell-head to wall socket". Reliance wants to shelve all proposed coal-based projects and move towardsgas. BSES has decided to exit from the joint venture, by selling its equity stake to DVC.

TransmissionTaking the leverage from the new Electricity Act which gives freedom to trade power both in physicalterms and through derivatives, BSES Ltd is to set up two new corporate entities, Reliance EnergyTransmission and Reliance Energy Trading, to pursue opportunities in transmission and energy tradingsectors to enhance reliability in the power supply to its networks across the country. This would also helpto balance deficits and surpluses in different regions.

BSES has installed about 240 km of the twin double circuit (multi circuit) 220 kV dedicatedtransmission lines linking the Dahanu Power Station to the company's distribution network.

Constructed and commissioned all the three state-of-the-art 220 kV Receiving Stations atGhodbunder (300 MVA), Versova (300 MVA) and Aarey(300 MVA) in Mumbai for receiving thepower supply from Dahanu to Mumbai.

Installed over 600 km. of high tension power transmission lines for various utilities including inNorth Eastern States and at various parts of Saudi Arabia. Gathered expertise to offer services forturnkey projects and consultancy for transmission and distribution networks.

An in-house Engineering Cell co-ordinates engineering activities, transmission networks,receiving stations and sub-transmission networks of BSES.


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The BSES Transmission Division geared upto procure and install transmission lines efficiently,anywhere in the country.

Electric Supply (Distribution)The Electric Supply Division of BSES was incorporated in 1929 to take up distribution of electricity in the

suburbs of Mumbai. It caters to about 2.067 million consumers, covering about 9.0 million population.BSES has a networking area of 384 sq.km in suburbs and surrounding areas of Mumbai. It receiveselectricity from own generation plant & in addition from TEC. BSES is sole supplier to customers withdemand upto 1000 KVA and 99.9% on-line reliability in power supply.BSES holds an exclusivelicense to distribute power to users in Mumbais northern suburbs upto 2011. Itslicensed area covers an estimated 7mn people including commercial, residential & industrial consumers.It operates a 250X2MW thermal power plant at Dahanu and distributes it using its own grid.BSES actively participated in the pioneering and trend setting initiative of the Government of Orissa inprivatizing its distribution system. In response to the international competitive bids invited by Gridco,BSES bid and acquired the controlling equity stake of 51% of the equity share capital of 3 of these

distribution companies viz. NESCO, WESCO and SOUTHCO, in 1999. The net worth of the threecompanies has been eroded with losses expected to touch Rs 9 billion.North Eastern Electricity Supply Company of Orissa Limited (NESCO), headquartered at Balasore catersto a consumer base of 0.22 million covering an estimated population of 9.18 million on a licensed area of28,000 sq. km. with an estimated energy input of 2,258 MUs.Western Electricity Supply Company of Orissa Limited (WESCO), headquartered at Burla, caters to aconsumer base of 0.27 million covering an estimated population of 9.40 million on a licensed area of48,000 sq. km. with an estimated energy input of 2683 MUs.Southern Electricity Supply Company of Orissa Limited (SOUTHCO), headquartered at Behrampur,caters to a consumer base of 0.31 million covering an estimated population of 8.71 million in a licensedarea of 47,000 sq. km. with an estimated energy input of 1,433 MUs.

BSES is also participating in the financial bids of Delhi Vidyut Board (DVB) in the privatization ofdistribution circles. It has also taken a part of Rajasthan distribution system.

BSES has 3,853 Sub-stations, 5415 Million Units of annual supply of electricity with maximum demand of1198 MVA. The bill realization for BSES is over 99.5%.

Power Distribution- Growth in Sales (%)

Year Growth in Sales (%)1993 3.491994 5.851995 5.381996 11.79


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1997 4.041998 6.031999 6.552000 4.42001 4.78

BSES attaches great importance to reduce the system loss. Over the period of last three years, majors stepshas been taken: on-site testing of meters of high energy consumers, installation of state-of-the-art staticmeters, phasing out existing meters by good quality meters, strengthening of supervision and checking ofmeter readings, MIS based on computerized billing and follow up action, Improving vigilance activities,Installation of 11 kV / 33 kV capacitors to maintain quality of power to consumers, Installation of LTcapacitors at common service of industrial/commercial complexes, Strengthening and toning up ofdistribution network.The system loss declines for the fourth year in succession and comes down to 11.50%, the lowest in thecountry.

Distribution Loss (%)1993-94 14.951994-95 13.901995-96 12.501996-97 11.701997-98 11.601998-99 11.53

1999-2000 11.502000-01 11.60

Power Distribution - Growth in Sales ( in million units )Year Million Units1993 33781994 35311995 37671996 42121997 43811998 45451999 49502000 51682001 5415


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Power Distribution - Consumer ProfileConsumer Profile Unit Sold (%) Revenue Earned (%)

Residential 52 35Commercial & Others 28 40Industrial 20 25

Power Distribution - Tariff Structure

Equity Holding as on March 31, 2001Shareholding Distribution PercentageForeign Holding 14.45Government financial Institutional Holding 39.66Corporate Bodies (Reliance- 30%) 30.33Others 15.55Reliance, the single largest shareholder in BSES, has been hiking its stake in the company by creepingacquisition, FIs have now hiked their combined stake by 3 % from 36 % to around 39 % at the end of June,2001 through creeping acquisitions.

PerformanceBSES net profit plunged 83% to Rs 146 million for the quarter ended December 31, 2002, from Rs 867.9million recorded during the corresponding quarter in the previous year. Total income has fallen to Rs6.81 billion during the quarter from Rs 7.17 billion during third quarter of 2001-02. Company officialsdeclined to disclose reasons for the fall in sales. While total sales have fallen, expenditure has risen to Rs5.74 billion from Rs 5.53 billion.

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Latest News Items. (Click for More)Power bills set to surge in Delhi as BSES Rajdhani, BSES Yamuna

and NDPL claim huge losses 6/15/201112:00:00 AM The summer is likely to get hotter. Get ready to pay a fatter power bill because the regulator,

DERC, is working out past dues owed to power companies which will be recovered from you.This will be in addition to a new higher tariff that will be shortly announced by the regulator. Twoweeks after the Delhi high court gave the go-ahead to DERC to announce new tariffs for 2011-12, the regulatory body has started the process to dispose of past dues claimed by discoms BSESRajdhani, BSES Yamuna and NDPL. Officials said recovery of past dues for 2008-09 and 2009-10 will be in addition to the tariff hikes sought by the licensees for the current financial year 2011-12 .

These dues are not small. For 2008-09 , south Delhi discom BSES Rajdhani claims a revenuegap of Rs 1,003.68 crore, east Delhi discom BSES Yamuna Rs 235.50 crore and north Delhidiscom NDPL Rs 405.88 (excluding a carrying cost of 11.5% that has to be allowed by theregulator additionally). For 2009-10 , BSES Rajdhani claims a gap of Rs 2,378.80 crore, BSESYamuna Rs 1,353.93 crore and NDPL Rs 1,356.04 crore.

DERC, under its chairman P D Sudhakar, appears to have found merit in the claims of the powercompanies though his predecessor, Berjinder Singh, had not only rejected the claims of the

discoms but maintained that the costs of these companies had come down and suggested areduction in their power tariffs. The government-run NDMC, which caters mainly to Lutyens'Delhi , is the only discom with a surplus of Rs 213.78 crore. The rest are demanding huge tariffhikes.

DERC has started the process to dispose of past dues claimed by discoms. For 2011-12 , BSESYamuna is asking for a 85 % hike, BSES Rajdhani a 67 % hike, and NDPL a 50% hike. NDMChas sought just a 16 % increase . The situation looks grim for consumers given the court'sinprinciple clearance to a recovery of past dues and the power companies' demand for a steepupward tariff revision, and given the fact that the regulator appears to find merit in thesedemands . Discoms have proposed a recovery mechanism for past dues to be distributed overthe next two to three years to ease burden on consumers. After the high court judgment on May29 that lifted the curbs on DERC for tariff determination process , DERC has also put theprocess on fast-track .

DERC chairman Sudhakar said: "Apart from the new tariffs of 2011-12 , we have also to take adecision to dispose of the backlog dues claimed by the power companies. Discoms have soughtrecovery of costs for 2008-09 and 2009-10 which has to be given to them soon. The court hasdeclared that tariffs for 2010-11 as void but the recovery of the costs for previous years are stilldue to discoms."

He added, "We are hoping to be able to announce new tariffs within a month after the hearing ."Discoms say delay in recovery of past dues will mean more carrying costs payable byconsumers. "The tariff we are currently charging was based on a power purchase input costwhere per unit was assumed to be Rs 2.63 . In 2009 , we were told to buy power from whateversource possible and at whatever cost. Additional purchases were made on top of our longterm(PPAs)."

Discoms must recover dues before tenant vacates : HC 6/15/201112:00:00 AM Discoms are bound to recover arrears before a tenant vacates the premises to ensure that the

liability does not fall on the landlord or subsequent tenant, the Delhi High Court has ruled. The
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High Court warned that failure by the discoms to discharge their duties would cause seriousimpediments in the tranfer of properties as people will hesitate to acquire any new propertyowing to fear of inheriting unwanted liablities.

"If the discoms are permitted to so allow the arrears of electricity charges to accumulate and donot take timely action for recovery from the person liable and then coerce the subsequentoccupant to pay the same, it would be a serious clog on transferability of immovable properties.

"People would hesitate in acquiring properties for the fear of the unknown liability of electricitydues," the court said. Justice Rajiv Sahai Endlaw passed the judgement on a petition filed by theowner of a posh property in South-Extension-II market of South Delhi. "Distribution Companies ifthey are cautioned on the likely vacation of the property by the consumer liable for power dues,are obliged to ensure that the dues do not accumulate and are recovered so that they do not fallon the subsequent occupant," the high court said.

The court said the BSES Rajdhani Power Ltd cannot be negligent in recovering the duesespecially after being informed by the landlord on tenant's move to vacate the premises. In theinstant case the landlord had sought the court's direction to discom BSES Rajdhani Power Ltd torecover the due amount of Rs 55 lakh from the tenant. The landlord and the tenant of thepremises had been in a legal row following which the tenant vacated the premises. The landlordthen moved the High Court. However, the landlord who later learnt about the pending power billfiled the petition seeking a direction to the discom to recover the money from the tenant.

InfralineEnergy hosts conference on 'Power Transmission andDistribution: Harmonising two counterparts' in New Delhi 5/31/201112:00:00 AMInfralineEnergy hosted the first day of its conference on Power Transmission and Distribution:Harmonising two counterparts in New Delhi on May 30 at the Imperial Hotel.

The day started with the inaugural session on the Burgeoning Transmission and Distribution Trendsmoderated by Anil Razdan, Former Secretary, Ministry of Power and saw a discussion by Ramesh Koul,General Manager (Engineering) Transmission Business Group, BHEL and Bijoy Kumar Misra,Member, Orissa Electricity Regulatory Commission.

Razdan initiated the discussion by listing down the issues faced by the distribution sector. He feared thatthe things might be going back in time rather than moving ahead, emphasised by a lack of understandingamongst the consumers. Though, he expressed hope at the recent initiatives taken by the DelhiElectricity Regulatory Commission (DERC) for making the consumers aware of the different aspects ofthe tariff formulation. He said that the sector has become too large and the business near unsustainablewith the huge figures of the AT&C losses.

Stressing on the point that the power sector has not three but four segments generation, transmission,distribution and consumers he said that it would be very difficult to proceed further without consumer

participation and an increased participation of the consumers would be a win-win situation for both thegovernment and the consumers.

Koul spoke on the growth of the transmission network in the country and the corresponding issues withthe sector. Explaining the unification of the five regions of the country into a national grid, he said that theinter-regional capacity gives the freedom to power developers to set up their stations anywhere andmake the power available to consumers anywhere in the country.

Praising the developments in the sector, he said that the transmission sector of the Indian power industry


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has made quantum jumps and that the next level of the transmission level in India would be of 1200 KV.

Misra spoke on the distribution segment and the regulatory importance. Stating that Orissa was the firststate to go for full scale privatisation of the states distribution sector, he said that the critics have beenvery harsh on the state regulators. He said that while everybody has been asking for a rise in tariffs, theregulators have to think if the consumer would be able to pay up the increased tariff. He further said that

the distribution is beseeched by all kinds of problems whether it is lack of money, the right attitude ormanpower and none of these three aspects can be ignored.

Razdan concluded the inaugural session by stating that the distribution sector is the revenue chest of thesector and it has to circulate the money upwards right up to the generation sector.

The next session of the day was held on the Power Transmission: Enablers and deterrents of thegrowth and had Ravinder, Chief Engineer, Central Electricity Authority as the speaker and Razdan asthe moderator.

Talking on the various aspects of the transmission sector, Ravinder said that not only has there beentechnological advancement in the grid but the rules and policies have also developed a lot. Drawing acomparison between the transmission capacity and the transfer capability, he said that the two aspects

follow the law of the diminishing returnsthe transfer capacity doesnt grow as the transmission capacitygrows. He also mentioned that a lot of HVDC corridors are on the anvil in the states of Chhattisgarh andHaryana with a capability of carrying 6,000MW.

He said that the country has created a cost-effective system with hardly any duplication of thetransmission lines; however the investments are still huge considering the massive distance. Stating thatthe transmission charges are to the tune of one crore per MW, he said that the sector only invests whenissues like land acquisition and clearances are cleared. This cautious approach though gives them lessertime for completing the projects but it makes sure that the sector does not create stranded assets. Healso said that very soon point of connection tariff would be rolled out in the country, which would be adistance and direction sensitive tariff. To help the consumers from feeling the pinch too much, the tariffwould have a 50 percent component of national average and the rest half of the point of connectionaspect.

Razdan concluded the session saying that a SPV (Special Purpose Vehicle) which can take care of thenecessary clearances has become a must requirement for the transmission sector.

The third session was held on the topic of the Power Distribution: Initiatives to make the sectorstrapping, which had Razdan as the moderator and Ramesh Nara yanan, CEO of the BSES YamunaPower Ltd as the speaker.

Narayanan spoke on the five key areas of Finance, Technology, Manpower, Strategy and Innovation.Comparing the generation and the transmission sectors with the distribution sector, he said that the othertwo sectors have got it easy when it comes to raising the finance whereas in the distribution sector,financing depends only on one factor which is the state of the balance sheet. In case, the balance sheetis not in a robust state, it is very difficult for the discoms to garner finance. Commenting on theconcurrent status of the Indian power sector, he said that the distribution segment hardly has any centreparticipation with the states playing the big role. He also said that he feels nothing wrong in the reformsstarting at the generation end however the distribution sector should be provided an enablingenvironment.

He also highlighted the status of the technological and the manpower issues in the distribution sectorsaying that the country has to have distribution specific training programmes to take care of the massiverequirements of the sector. Talking on the strategy part, he listed the various initiatives like Electricity forall, raising the per capita consumption of power, reduction of AT&C losses and cost of supply, improving


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the quality and reliability of supply. Under innovation, he highlighted the need for dedicated centres forR&D and the need for advance research in remote metering, people less customer care, money lesstransaction, automation, safety and O&M practices.

Session four brought forth the discussion on Technological Improvements in the Power sector and hadSamant Nagpaul, NDPL and Bharat Vats, Head-BD, Energy and Utility, IBM as the speakers. The

session was again moderated by Anil Razdan.

Nagpaul spoke on the IT initiatives in the power distribution sector as a whole as well as those taken byNDPL.

Elaborating on the current environment in the power sector, he said that there is a need for effective ITinitiatives which can help in making the Indian systems comparable with the world standards. He alsospoke on the various IT services offered by the website of the company as well as on the various ITplatforms which enable the many initiatives observed in the Indian power sector.

Vats also spoke on the technological improvements in the power sector facilitated by the various ITcompanies. He enumerated the various advantages of the proposed Smart Grid and Cloud Computing.Listing the reasons for all these technological advancements, he said these would support faster

application development, reduce development and operating cost and improve overall security posture.He concluded the session by soliciting the participation of all the sectors to uncover a smarter planet.

The last session of the Day One of the InfralineEnergys conference was held on Regulatory Policies:Reforms requirement and adaptability. The discussion was moderated by Razdan and saw inputs fromShyam Wadhera, Member of DERC.

Wadhera highlighted the regulatory issues in the power sector and the initiatives taken by the regulatorsto resolve them. He emphasised that regulators need to do a balancing act while considering the interestof all the stakeholders. He also enumerated the various advantages bestowed by the Electricity Act of2003, the guiding principles governing the tariff regulations and the many steps taken by the Forum ofRegulators (FOR) like loss reduction strategies, Demand Side Management and Energy Efficiency, Multi-Year Tariff (MYT) framework and distribution margin, amongst others.

InfralineEnergy 'In-Conversation' with Shri Ramesh Narayanan,CEO, BSES Yamuna Power Limited (BYPL) 5/27/201112:00:00 AM


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InfralineEnergy 'In-Conversation' with Shri Ramesh NarayanaBSES Yamuna Power Limited (BYPL)

By Chhavi Tyagi, Correspondent, InfralineEnergy

As the temperature rises, Delhiites have no choice other than to switch on their energy-intensive electric homeYamuna Power assures that its consumers will have a comfortable summer, concerns have been raised by BSbusiness. Against this backdrop, InfralineEnergy's Chhavi Tyagi spoke to Ramesh Narayanan on the preparedhandling AT&C losses and the issues revolving around the distribution sector.Edited excerpts.Q1) How prepared are you for the Delhi summers?

The operations and maintenance teams of the BSES Yamuna PowerLimited (BYPL) conducted a preventive maintenance drive during thelean winter months. This entailed repair and maintenance work in 2,250sub-stations and 50 EHV Grids. A special drive was undertaken torevamp 3,000 service pillars by retrofitting them with all required kits,eliminating loose terminals and painting them to give a face lift. Withthese measures already undertaken, our network is fully geared up forreliable power supply in the current season.

Are there going to be any shortages this season? This year we went only for the banking arrangements with a few hydroenergy-based states. We do not see any problem in the summerseason if Delhi is able to get 350 MW of power from the centralunallocated quota and 500 MW of power flowing from the Bawanapower plant by June. Like last year, we are hopeful that Delhiites willhave a trouble free summer.

"Essentially, the SERCs require clear norms toensure cost reflective tariff to sustain operations.Unfortunately, due to lack of such norms, there isa great deal of discretion available for varioustariff makers who are vulnerable to pressure fromstakeholders in the sector."

Q2) What steps have you taken for the losses resulting from powertheft? How successful have these initiatives been?

BYPL has created a record by reducing the AT&C losses from a mind

Q4) In spite of power being avutilities still go for load shedd

Power shedding cannot be a strcontain AT&C losses. BYPL hasTherefore, it makes business sereliably and recover the cost. Hodilapidated and outlived networkwhich are prone to outages, thoprogressively. Such outages, sopower supply. These factors are

supply to our consumers. Howevof all such deficiency in the syste

Q5) NDPL has entered into poits plans of setting up a powersuch plans?BSES has proposed an environmpower plant in Tikri in West Delhawaiting response from the conc

Q6) Pune implemented a systeWhat are the hindrances in imHow can uninterrupted and quamidst public perception with

The Pune model envisages a reconsumers for ensuring uninterrcharge ensures sourcing of experequirements. Such a reliability cHowever, it will be worthwhile thdiscoms uniformly in the country


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boggling 61 percent to about 19 percent in the past nine years. Now, toreduce the AT&C losses further, there is a need to invest in certaintechnical intervention and upgrade loss prone outlived systems.

As a first step, BYPL has identified such assets and has submittedproposals to Delhi Electricity Regulatory Commission (DERC) asking

for clearances so that execution could begin. These includereplacement of bare conductors, replacement of loss and outage proneoil type circuit breakers (OCBs) with RMUs and fixing of meter boxes inall such meters that are prone to tampering by using electronic devices.

"In the current scenario, the policy onlydescribes the process. We submit the aggregaterevenue requirement (ARR), after that, it is to thetotal discretion of the regulator as to how heinterprets the ARR and how he pulls out themagic tariff. There is no fixed formula. Define aformula, otherwise this sector cannot sustain.

This is the biggest gap in the sector." Further, we also proposed to install capacitors to compensate the everincreasing reactive load induced due to various energy efficientappliances like ACs, CFLs, T5, LED and electronic chokes.

Q3) Critics say that the SERCs have failed in their most importantjob of fixing the tariffs for discoms, what do you have to say onthis?Essentially, the SERCs require clear norms to ensure cost reflectivetariff to sustain operations. Unfortunately, due to lack of such norms,

there is a great deal of discretion available for various tariff makers whoare vulnerable to pressure from stakeholders in the sector. To avoidsuch situations, it will be worthwhile to define or enact a fixed formulawhich should be applicable automatically by all tariff makers so thatdiscretion and subjectivity are minimised. It is essential for sustenanceof the sector. While norms set for generation and transmission projectsautomatically ensure realisation of cost to generation and transmissioncompanies; for discoms, there are no such fixed norms. This leads toarbitrary and unnecessary financial strain on the distribution sector.

There are some issues which are just transient; others are long-termwith the distribution sector as a whole. The distribution sector needs toset a formula for tariff making and only if somebody deviates from the

formula, should there be a public hearing. This formula should factor inall the issues like the Wholesale Price Index, Consumer Price Index,power purchase cost variation, O&M cost, etc. It would help to run thebusiness smoothly.

"Since the discoms inherited a dilapidated andoutlived network, there are still elements in thesystem, which are prone to outages, though

not have to invent unique solutiothe tariff making process for the However, it would be a great hetimely implementation and smooviably.

"Today, the discoms business opportunitiadvantage of their hucustomer base. Thereavenues with an opengains of the discomsallied utility services.

Q7) Is it feasible to evolve a raall types of consumers will pa

A standard norm for power distritariff not only in Delhi but across

Q8) What steps has BYPL takeavail power at competitive cos

BYPL has tied up adequate longand nuclear stations at competitmade by CEA in the 17th EPS a

Q9) How is BYPL planning to which, indeed, is among the to

We are of the firm belief that thedone away with if standard normfor the implementation of which regulatory mechanism could loocustomer service, network devemeasure for efficient and effectiv

Q10) What is your take to cont

The discoms are not exploring athe sector take advantage of thebase. There is a need to look at

the efficiency gains of the discomservices.


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much of it is revamped. Such outages,sometimes, do cause disruption in the powersupply and these factors are being addressedprogressively to ensure a reliable supply to ourconsumers."

In the current scenario, the policy only describes the process. Wesubmit the aggregate revenue requirement (ARR), after that, it is to thetotal discretion of the regulator as to how he interprets the ARR andhow he pulls out the magic tariff. There is no fixed formula. Define aformula, otherwise this sector cannot sustain. This is the biggest gap inthe sector.

(InfralineEnergy thanks Shri RamPower Ltd (BYPL) for sharing his

The column 'In-Conversation', is

various sectors to share their viethe Indian energy sector.

For feedback on this article, please write to [email protected]

Explain how you diagnose health of discoms: High Court to DelhiElectricity Regulatory Commission 5/13/201112:00:00 AM

The Delhi High Court on Wednesday asked the Delhi Electricity Regulatory Commission (DERC)to explain the internal audit mechanism it used to ascertain the financial health of the Capital'spower distribution companies (discoms) before fixing tariff. The order came on a petition filed byan organisation representing residents' welfare associations - United RWAs Joint Action -seeking an independent audit by the Comptroller and Auditor General of India into the accountsof discoms NDPL, BSES-Yamuna and BSES-Rajdhani. A Division Bench of Chief Justice DipakMisra and Justice Sanjiv Khanna asked the DERC counsel to adduce an affidavit and stateclearly how the regulator performed its statutory function of ascertaining the financial positions ofthe distributors.

"We want a clear affidavit from you on the internal check mechanism. We want to know how doyou do it in accordance with the statutory rules. We want to know the procedure. We also wouldlike to see how do you work in 'due diligence' as far as ascertaining the accounts of the discomsare concerned for the purpose of tariff fixation," the Bench told DERC counsel H S Chandhiok.Fixing the next date of hearing in July, the Bench referred to the tariff fixation rule that sought a"prudent check" on the part of the DERC before it went ahead with the tariff fixation and said theaffidavit must explain how the said condition was fulfilled by the regulator.

The court, however, refused to issue notices to the discoms on the petition, saying they wouldfirst want to peruse the response of the DERC regarding their audit mechanism. There has beenan ongoing war of words between the discoms and the Delhi government on the issue of the

financial health of the former. Earlier this month, after BRPL and BYPL announced that theywere nearing bankruptcy and might be forced to shut shop from next month if they did not getfinancial help, Delhi Power minister Haroon Yusuf shot back saying the government would nottolerate blackmail or any attempt on the part of the discoms to hold Delhi residents to ransom.

Yusuf made it clear that the tariff determination was the domain of the DERC, which had alreadyinitiated the process. In April, the discoms, reportedly suffering a shortage of nearly 750 MW thissummer, had also written to the DERC to get an acknowledgment of funds owed to them. This,they claimed, would help them secure bank loans to finance power procurement. In March, theBench had reserved its verdict in a separate petition that had accused the Delhi government of
mailto:[email protected]:[email protected]


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succumbing to pressure from the discoms and staying the release of a tariff order approved byDERC last year.

Coal and gas price hikes in the international market set to inflate

your electricity bills 5/9/201112:00:00 AM Soon, your monthly electricity bill is likely to go up every time there's a hike in coal and gas

prices in the international market. Delhi's main power distribution companies, through a publicnotice on Saturday, made a strong pitch to regulator DERC for passing on the changes in globalfuel prices to the consumers on a monthly or quarterly basis.

To get this system going, BSES Rajdhani, BSES Yamuna and NDPL have sought immediateimplementation of periodic power purchase price adjustment mechanism in the tariff petitions for2011-12 . The mechanism basically involves passing on fuel price fluctuations to the consumers.Delhi's power companies are advocating implementation of periodic power purchase priceadjustment mechanism. If the proposal is accepted by DERC, which sources say is likely, aseparate column bearing fuel surcharge will be shown in consumer bills to reflect the current fuelprice in the market.

The discoms argue that they have to pay power suppliers like NTPC or Delhi's generatingcompanies, Indraprastha Generation Company Ltd and Pragati Power Corporation Ltd, on amonthly basis and the present method of recovery of these expenses takes them at least twoyears to get their legitimate returns. "Power companies in Delhi are already in a bad financialcondition and by borrowing money to pay power suppliers, it is the consumer who will end upwith the burden of having to pay carrying cost (interest) too. To avoid this, we have asked thecommission to institute a mechanism for passing the variations in power purchase cost to theconsumers on a monthly or quarterly basis,'' said a discom official.

Power sector officials say coal and gas account for up to 80% costs of power procurement.Power procurement costs also increase merchant power costs (power bought on short notice),which again discoms claim is priced depending on the demand-supply scenario. NDPL and

BSES officials said there have been drastic changes in fuel prices in the past two years, whichhave taken a toll on their balance sheets. With more hikes expected in coming days, discomssaid fuel costs had to be passed on to consumers. "Gas prices are expected to go up becauseafter the Fukushima nuclear disaster in Japan, there is a lot of pressure to shut down nuclearpower plants. Japan is likely to switch partially to LNG, and if that happens, there will always bepressure on LNG prices in the international market.

Coal prices will also certainly go up both internationally and in India. Already coal availabilityfrom domestic sources is limited and to procure coal for new plants, one will have to opt for themore expensive imported coal,'' said BSES Rajdhani CEO Gopal Saxena. Public opinion hasbeen invited on this proposal and a hearing will take place next month. Seventeen states alreadyhave this formula either on a quarterly or half-yearly basis and experts said there was goodreason to believe that Delhi discoms would get approval for the proposal too.

BSES seeks Rs 5 billion bailout, says cash will last for only a month -Subsidiaries have accumulated losses of Rs 70 billion 5/5/201112:00:00 AM

BSES, which runs the Capital's two power distribution companies, has sought a bailout of Rs 500


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crore, saying it has just enough cash to last barely a month. "We are struggling to stay afloat. Weshould be given some cost benefits otherwise we will bleed to death," chief executive officer anddirector Lalit Jalan said on Wednesday. Subsidiaries BSES Rajdhani and BSES Yamuna haveaccumulated losses of Rs 7,000 crore and lose Rs 8-9 crore daily because of "inadequate"tariffs.

A tariff hike of at least Rs 2 per unit in Delhi was indispensable, Jalan said, adding that while the

cost of power had increased by 200% over past eight years, retail tariffs had increased by 15%.Power tariffs were last revised in 2005. "There is an unprecedented liquidity crunch. We havedebt of over Rs 9,000 crore and banks are not willing to extend any more loans to us," Jalansaid. Reliance Infrastructure-owned BSES has sought an interim support of Rs 500 crore fromthe government and will have to borrow Rs 4,245 crore in this financial year. It is also talking toPower Finance Corporation and Rural Electrification Corporation to raise funds.

No tariff order this year, thanks to power panel's mess, says HC -HC pulls up DERC for delaying decision on new tariff order 1/27/201112:00:00 AM

The Delhi High Court on Friday adequately hinted that there would be no power tariff order for2011-11 thanks to the mess created by the officials of the Delhi Electricity RegulatoryCommission, as it was too late to set things right. A Division Bench of Chief Justice Dipak Misraand Justice Manmohan, while hearing a petition seeking a court directive to enforce a tariff orderreportedly decided upon last year by the then member of the DERC, said a new tariff order forthe current year did not look probable.

It is not possible to have a tariff order for 2010-11. We think it is very late and you cannot sit in atime machine to go back... Thanks to the mess created by the (DERC) members, the whole yearhas become a big zero, said the Bench, saying that even if the process of tariff fixation wasbegun soon, it could not be completed in time for the current year.

To this, Senior Advocate Mukul Rohatgi, who was appearing for the BSES, suggested that therecould alternatively be a multi-year tariff regime whereby the tariff could be fixed for a certain

number of years. The court asked him and the counsel for the North Delhi Power Limited (NDPL)to file written submissions in the matter. The Bench also said it was still unclear whether a tarifforder had been decided upon by the DERC, as claimed by the petitioner, and if yes, whether thecourt could order the DERC to publish it now.

The court, however, minced no words while censuring the DERCs functioning and castigatedthe appointment procedure adopted by the Delhi government. The way these members haveconducted themselves, we are at a loss of words. They quarrel among themselves, keepchanging opinions and treat official files as their personal ones... Look at what has it costconsumers, the Bench commented.

The Bench asked the government to function proactively in selecting members for theCommission. You have the power to oversee that good and competent people are appointedand that they can handle the intricacies of power tariff fixation, the Bench told Senior AdvocateDushyant Dave and Najmi Waziri, appearing for the government. The reply of the counsel,

meanwhile, disclosed an intriguing problem. What can we do when nobody wants to apply (forthe post)? We cannot get even two good economists to discharge functions as DERC members.We sufficiently advertise across states and choose the best among whosoever applies, Davetold the Bench.

The Bench also asked the government to defend, on the next date of hearing, their note to theDERC in May 2010, whereby the body was directed not to issue a tariff order till the time theycould comply with the National Tariff Policy. We must tell you that we are going to quash yournote ruthlessly. We want to lay down a law on this because your action is not innocuous. Youcannot issue such an order to the DERC, the Bench said. The hearing gave some relief to the


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government, which was directed to present files on the appointment of J P Singh as a newDERC member. The Bench, however, refrained from comments in the matter, thereby notrestraining the appointment of Singh, who is slated to take over in the first week of February. Thecourt will hear the arguments on February 11.

Kerala: Import capacity limitations because of congestion in

transmission lines during the summer months pose major problem 1/14/201112:00:00 AM Although Kerala is comfortable with hydel power generation potentials till next monsoon, import

capacity limitations because of congestion in transmission lines during the summer months -February, March and April - pose a major problem, given the consistent rise in powerconsumption. The transmission system is handicapped by the non-commissioning of the line forevacuating power from the thermal plant at Koodankulam in Tamil Nadu, which is believed to becommissioned by March, to Kerala, a Kerala State Electricity Board (KSEB) source said.

The interstate lines to evacuate power from other States are needed at the peak demand periodwhich is about 3,000 MW. Where as, the capacity of interstate feeder lines is 1,000 MW only, hesaid. The Koodankulam-Kochi feeder line, which has been completed up to Thenmala in Kerala'sKollam district from Tamil Nadu, when completed, would help to evacuate power from othersources to the State.

Therefore, interstate transmission network is inevitable for bringing power to the State, as theKSEB has entered into tie-ups for power projects in Tamil Nadu such as in Vallur and Tuticorin,for the Cheyyur ultra mega power project and Kuggi project in Karnataka for purchase of power.Though such projects come under the Central Power Grid Corporation, being the State utility theGovernment has to facilitate its construction, he said.

To resolve the crisis on the construction of the line from Thenmala to Kochi the StateGovernment and the KSEB have offered high compensation to land owners - in fact, highest inthe country. Politicians from both the ruling coalition and opposition at the higher levels realisethe inevitability of having the feeder line to evacuate power from Koodankulam, he said. But

opposition to the construction of the line continues at the lower levels. In fact, non-completion ofthe feeder from Thenmala to Madakkathara in Thrissur due to the opposition by rubber growersis depriving the State of cheap power from North Indian States in winter months and surpluswind mill power from Tamil Nadu.

Low-cost power absorption from these sources is possible provided the feeder is completed andcommissioned, industry sources said. Meanwhile, good monsoon rains spread over almost sixmonths of last year resulted in the storage of water in the reservoirs of the hydel projects rising to83 per cent of the combined capacity for the first time after 2006, KSEB sources said.

With the present storage levels the board could easily generate 21 million units (mus) daily tillthe next south-west monsoon starts from June 1. 3,400 mus could be generated with the presentwater storage in the reservoirs. Average daily consumption has grown 5 per cent from the lastfiscal, raising daily requirement of power to 50 mus. Nearly 20 mus are drawn from the centralgrid, 21 mus are generated by the hydel projects, less than 4 mus are bought from National

Thermal Power Corporation's Kayamkulam thermal plant and the balance from the open market.At the peak hour, 1 mus are also generated by the board's diesel-generating units.

Sharp rise in naphtha prices has pushed up the cost of power generated by the BSES to aroundRs 9 a unit. Hence, the board has been conserving its hydel sources. Since the power boughtfrom Kayamkulam thermal plant is mixed with coal-based power, the cost comes to around Rs 5a unit. The open market price is also between Rs 4 and 5 a unit. The State is comfortably placedtill the next monsoon, except for some minor problems during the summer.


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Lack of clarity on fuel linkages deters private players in powersector 1/6/201112:00:00 AM

The optimistic pronouncement by the Union Minister of Power, Mr Sushil Kumar Shinde, at theElectricity East Summit in Kolkata recently, that the Twelfth Five-Year Plan (2012-17) will have a50 per cent share by private sector in the capacity addition to power generation in the countryappears to be a wistful crystal-gazing. Although the power sector reform for encouraging higherparticipation by the private industry began in the country coterminous with the economicliberalisation in the early 1990s when the Narashima Rao government offered counter-guaranteeto power projects, much water has flowed down the two decades in terms of changing archaiclaws and removing other constraints bedevilling this sector that was mostly in the hands of theStates.

In the first decade of this century, the Government put in place a raft of reform measuresincluding the National Electricity Policy, 2005, the Electricity (Amendment) Act 2007 amendingcertain provisions of the Electricity Act, 2003 which incorporated features such as no licence forsale of power from captive units and expanding the definition of theft to cover the use of

tampered meters and use for unauthorised purpose and the notification of the Tariff Policy onJanuary 6, 2006. In fact, the Tariff Policy has among its multiple remit to ensure financial viabilityof the sector to attract investment. The government also put in place the requisite guidelines forprocurement of power by distribution licensees through competitive bidding.

In its bid to lure foreign investments in the power sector, foreign direct investment (FDI) upto 100per cent was permitted under automatic route for generation and transmission of electric energyproduced in hydro electric, coal/lignite based thermal, oil-based thermal and gas-based thermalpower plants, power trading and in distribution of electric energy to households, industrial,commercial and other users.

Private distribution companies (Discoms) prior to privatisation/ liberalisation in the early 1990sand afterwards make an interesting contrast. Between 1897 (Calcutta Electricity Supply Co-CESC) and 1929 (BSES, Bombay) there were only seven Discoms across the country mostly inWest Bengal, Gujarat, Maharashtra and Kerala. This number has gone up to another 10 in the

subsequent period spanning 1993 to 2006, according to a response by the Minister of State forPower, Mr Bharatsinh Solanki, in the Lok Sabha on November 12, 2010.

After the transmission segment has been opened up in 1998 through the Electricity Laws(Amendment) Act, 1998, there are only 10 companies in the private sector. What agitates theprivate industry from involving itself in power generation and distribution has been quite knownas its comfort level when competing with subsidised and ineptly-managed State power utilities.

In fact, a study commissioned by the Power Ministry to the Indian Institute of PublicAdministration (IIPA) on the impact of reorganisation of the State Electricity Boards (SEBs)pointed out that despite some shortcomings, the overall impact of restructuring has beenpositive and in the right direction. But, it is a fact that only four States - Andhra Pradesh,Haryana, Karnataka and Orissa - that have unbundled distribution as most of the SEBs areunwilling to cede this part of operation purely for political considerations to appease voters orspecific constituencies such as farmers or industrial houses.

This had also become a milch-cow for clandestine operations by errant elements within theorganisation. A Delhi-based energy consultant Mr P. Balakrishna said, when there is lack ofclarity on fuel-linkage be it coal or gas with environmental factors swaying the former and theGovernment's not too transparent handling of the latter, the Minister's assertion that India willhave a surplus power soon appears a mere wishful thinking.

Policy analysts say that unless the government clears the cobwebs and vested interests orenvironmental overkill surrounding the availability of fuel such as coal for thermal power stationor gas for gas-based power plants, the interest of the private sector to invest in this capital-intensive and long-gestation projects would not be sufficient to foresee a major chunk of itscontribution to the capacity addition programme the Power Ministry is so over-ambitiously betting


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on.

BSES Rajdhani Power and BSES Yamuna Power in association withDelhi High Court Legal Services Committee to hold 'Lok Adalat' 12/8/201012:00:00 AM

BSES Rajdhani Power Ltd. (BRPL) and BSES Yamuna Power Ltd (BYPL), in association withDelhi High Court Legal Services Committee, will organise a two-day Lok Adalat' on December11 and 12 on the Delhi High Court premises. The BSES companies operate two of the threeprivate distribution zones in Delhi. The two-day adalat will provide BSES customers anopportunity for on-the-spot settlement of their power theft cases, relating to both direct theft andmeter tampering, a BSES release said.

Power: Sufficient rains place Kerala in comfortable position 12/6/201012:00:00 AM Sufficient rains this year and the consequent inflow into the reservoirs of all the hydroelectric

projects have placed the State in a comfortable position as far as power is concerned, besidesonly using the least quantity of costly thermal power. The combined storage level of water in allits reservoirs has reached 88 per cent of their capacity, while in Idukki it has reached 90 per centof its capacity, senior KSEB sources said. They said after 2007, water storage level has risenenough to generate 3,634 million units (mus), which is about 300 mus more than that of lastyear.

Given the good inflow, generation of power has been concentrated to the small hydel projects,prone to spilling over to avoid wastage of water, while it would help conserve the storage inIdukki for the summer. Good north-east monsoon rains have helped KSEB not to draw powerfrom thermal stations such as BSES and Brahmapuram Diesel Power plant in November. Theaverage daily demand for power in November was 46.9 mus. It was met by drawing the centralshare of 19 mus and generating 17 mus of hydel power, and taking 5mus from thermal powerplants under contractual obligation, while the balance requirement is filled by purchasing fromthe open power market, they said.

At present, only 3 mus of power are generated daily from the Idukki project which might beraised to 4 mus depending upon demand and similarly, and generation from Sabarigiri wouldalso be increased to 4 mus, they said. The objective of the Board during the current financialyear is to minimise the use of costly thermal power which costs to over Rs 7 a unit. According tothem, till the end of the current financial year, the situation is l ikely to remain comfortable. But thefuture would depend on the summer rains. Given the current trend, weathermen apprehended

some changes in the wind and temperature patterns which might deprive the State of goodsummer showers, they said. In that case there could be some problems, they pointed out.

Total power requirement during the current fiscal is at 18,000 mus and that would be met withoutany problem, they said. The sources said the Board had recommended the use of gas as fuel forits Diesel Power Generating plant at Brahmapuram. They said the use of LNG as fuel is likely tobring down the cost of power for a unit, if the gas price is not fixed by linking it to crude. Theysaid thermal power from NTPC costs around Rs 7.60 for a unit, while we can purchase power atRs 3.5 to Rs 4 a unit on an average from the open market.


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BSES Rajdhani Power and Indian Institute of Technology, Kanpur

enter into a technology pact 10/29/201012:00:00 AM BSES Rajdhani Power Ltd (BRPL), which operates one of the three distribution zones in Delhi,

and the Indian Institute of Technology (IIT), Kanpur, have entered into a memorandum ofunderstanding (MoU). The primary focus of the partnership will be to further optimise andimprove the quality of power delivery to the consumers leveraging next-generation research andtechnology, a BSES release said. In addition, IIT-Kanpur will train and equip BRPL engineerswith next-generation knowledge and tools. The agreement, signed in Kanpur, will be for a periodof three years. The MoU will not only facilitate cutting-edge research in the realm of powerdistribution, but will also enable BRPL to get expert help in resolving complex technical issuesfaster and more efficiently, the statement said.

Kerala not to plan hydel projects now 9/3/201012:00:00 AM Its not the customary red flag but green flag that has been planted at hydel project sites in

Kerala. The Centres refusal to grant environmental clearance to the 150 MW Athirappilly projecthas prompted the state to overlook hydel projects in future. Two earlier proposals for big hydelprojects, at Silent Valley and Pooyamkutty, remained non-starters because of denial ofenvironmental clearance. Whatever be the fate of the Athirappilly project, the Kerala StateElectricity Board does not seem to be in favour of big hydel projects in the state. The stategovernment will focus on gas and coal-based projects.

This will ensure that Kerala will lose the advantage of offering cheap power for industrialventures. A network of hydel power stations had ensured that KSEB was able sell power toconsumers at a very low price. Almost 60% of power generated in Kerala is from hydel projects.The rest comes from thermal energy plants of NTPC and BSES. The scenario is likely to change,says KSEB chairman Rajeev Sadanandan. The state cabinet has given the go-ahead for twoLNG-based power projects 1,026 mw at Brahmapuram in Kochi and 2400 mw at Cheemeni inKasargod.

From 2500 MW, the peak demand is predicted to increase to nearly 4000 MW in another fouryears. The Cheemeni project will be based on coal and gas. Since this will involvetransportation cost to bring coal, Kerala consumers will no longer be able to enjoy cheap power,Mr Sadanandan said. The power cost could jump from the current average of Rs 3.90 per unit toaround Rs 5 per unit once the projects go on stream by 2014. The Rs 3,500-crore LNG importterminal of Petronet is on schedule and is slated to begin operations by 2012-end. The company

has also planned a 1200 mw power project near the terminal from the cold energy releasedduring the re-gasification of LNG.

CCI proposals to reduce power sector tariffs and Delhi's two

monopolistic power distribution companies to feel the heat of8/11/2010

12:00:00 AM


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competition

The competition regulator wants import tariffs on power equipment to be scrapped and Delhistwo monopolistic power distribution companies-BSES and NDPL-to feel the heat of competition.Further, it intends to divest municipal bodies of their exclusive right to develop urban slums andlet private real estate players enter this area through a competitive bidding process. In its wide-ranging recommendations set to be issued to the Planning Commission for the NationalCompetition Policy (NCP), the Competition Commission of India (CCI) is understood to havestuck to the principle that policies that quarrel with the consumers right to a fair deal would needto go.

If CCIs proposals find their way to NCP, it would have the potential to change not only manyextant government policies, but also the remit of many sectoral regulators. What makes the NCPless threatening to the regulators is, of course, the fact it lacks a statutory backing. Under theCompetition Act, CCI has powers to act against anti-competitive agreements and abuse ofdominant position. It is also expected to soon get the powers to regulate mergers andacquisitions that can have an adverse effect on competition in the relevant geographicalmarkets. The NCP will represent the overarching framework under which CCI would operate.

The commission had earlier cracked down on the National Capital Regions two power discoms -

Anil Dhirubhai Ambani Groups BSES and the NDPL (a joint venture of Tata Group and the Delhigovernment)-for not allowing the consumer to instal the meter of his choice. The regulator saidthe two discoms with monopolistic presence in their respective areas were abusing theirdominant position. Through these recommendations, we are looking to cover a wide plethora ofsubjects. For instance, electricity is a major consumer concern and if only a handful of playersget to supply it, then there could be a significant case for abuse of dominance...we hope tochange that, a CCI official said on conditions of anonymity.

Scrapping the import tariff on power equipment would hit domestic major Bhel and benefitChinese equipment suppliers, even as it would reduce the cost of power to the consumer. Anyimport duty could increase the cost of power, hurting consumers, the CCI official said. Thegovernment is on the verge of imposing a 10% duty on ultra-mega power equipment. It isestimated that the duty would result in Rs 1-3 increase in the cost of power per unit.Conceptualised in 2006-07 by Planning Commission deputy chairman Montek Singh Ahluwalia,

the NCP was to be drawn up on the lines of Industrial Policy and Electricity Policy. For thispurpose, the Planning Commission had set up a working group to send in the recommendations.

Vinod Dhall who headed that committee said that the idea behind the NCP was to create acompetitive environment. Even in providing basic services like education, health and banking,the government should follow the principles of competition, he said. Other importan tsuggestions that could form part of the NCP include providing fiscal incentives to infrastructurecompanies to develop areas in the countrys tribal belt and issuing vouchers to students whowould then have the freedom to attend any government school of their choice. Though veryambitious in parts, the NCP is a step in the right direction, a corporate affairs ministry sourcesaid.

A Delhi-based competition lawyer, however, explained that CCIs recommendations could createfriction with other designated regulators and the government may be required to demarcate theprecise areas of jurisdiction. We have already seen the recent controversy over Ulips between

Sebi and Irda...Lets hope that we dont see a repeat of that once CCIs suggestions areaccepted, he said. MM Sharma, head, competition law practice at corporate law firm VaishAssociates welcomed the CCI suggestions. He said that the commission should refrain fromentering into any area that deals with tariffs. For example, the CCI should not get into the affairsof the telecom sector. Even if they find a case for anti-competition (like tariff fixation byoperators) let TRAI deal with it, he said.

Sharma added that once the CCI is empowered to look into mergers and acquisitions after thenotification of sections 5 and 6 of the Competition Act, 2002, the CCI should not tinker withSebis listing agreement as it could create a lot of unnecessary regulatory problems. In its shorttenure, the CCI has found itself in the middle of several controversies. In 2009 following an


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investigation order by CCI into the pre-payment penalty charged by banks for foreclosing loans,the RBI had reacted sharply. Similarly, CCIs M&A regulations would potentially be in conflictwith telecom regulator TRAIs norms in this regard.

Power shortage grounds T3's domestic operations - Backup might

not be sufficient to support entire system on existing availability 8/10/201012:00:00 AM The domestic half of the new terminal T3 will only get operational when, among other issues that

remain to be sorted out, Delhi Transco is able to set up a 220kV grid inside the airport for adedicated power supply to the terminal. According to sources, the airport has sufficient powerbackup but once the domestic side gets operational, the power demand is going to risesignificantly and the backup might not be sufficient to support the entire system on the existingavailability.

The grid was to have been ready before the terminal was made operational in July, but theproject got delayed . Now airport sources say that domestic operations will start only after thegrid is finished and BSES is able to supply power to the entire terminal. Already we have be enfacing power supply disruption on several occasions and it is not good for the airports systemsto deal with constant fluctuations. We are ready with the operational part of the domestic sectionof the airport, but cannot risk operationalising it before we are assured of sufficient power, saidsources.

A meeting to finalize the date for starting domestic operations has been convened by the civilaviation ministry in the coming week. Based on a review of preparations by all stakeholders, theministry will decide if the current date of August 27 will need to be revised. "We are ready withour terminal and are waiting for essentials like power and water to be made available. A call onthe final date will be taken next week at a meeting called by the ministry where the real pictureon what is lacking where will become clear, said Ashwani Khanna , vice -president , terminaloperations, DIAL.

Delhi Transco officials said that the work on the grid was on course and that it would be ready by

the end of August. However, sources said that there were chances it would extend a little intoSeptember since some work was still left. Most of the work is complete, but there are someissues to be sorted out. Once the main work on the substation is finished, BSES would thenhave to provide connections. It is quite possible that the system would be completely ready withconnections set up only by the first week of September , said sources.

BSES Yamuna and BSES Rajdhani set to complete CWG works 8/7/201012:00:00 AM BSES Yamuna and BSES Rajdhani, two of the three private power distribution companies

operating in the Capital, announced on Friday that they were on track to complete their share ofthe projects for the upcoming Common Wealth Games at a cost of around Rs 74 crore. Thisincludes the work involved in augmenting distribution system at all 12 Games venues stadiainfrastructure.

In tandem with others civic agencies such as DDA, CPWD and PWD, BSES Rajdhani andBSES Yamuna had prepared a blueprint to strengthen and augment the distribution network inall the stadia, guest houses and other Games venues in their licensed area. Working under tight


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schedules, BSES is well on-track to complete the CWG work, it has been tasked with, astatement from BSES said. BSES has executed projects worth around Rs 74 crore for creatingand strengthening the power infrastructure at various Games venues by installing new panels,feeders and cables, the statement said.

SC notice to BSES, NDPL over burden sharing 8/3/201012:00:00 AM The Supreme Court has admitted a petition filed by the Delhi Development Authority (DDA)

challenging the order of the Appellate Tribunal for Electricity that asked it to share 50%development charges for electrification with its distribution licensees or discoms. A Benchheaded by Chief Justice SH Kapadia while admitting the petition also issued notice to DelhiElectricity Regulatory Commission (DERC), BSES Rajdhani Power, BSES Yamuna Power andNorth India Power Ltd.

DDA said that under the Electricity Act 2003, the discoms are bound to lay down the necessaryinfrastructure at their own cost for conveyance and transmission of power in their areas ofoperation and instead they can collect such developmental cost from the consumers in regulartariff. The civic body also argued that it was not liable to make any such payment as it is not aconsumer of electricity and as such no demand can by made to it. The discoms are seekingsharing of electrification costs of works of upto 11KV capacity within the areas developed by theDDA. The discoms are claiming 50:50 share with the DDA on the basis of certain past practicesbetween the latter and the erstwhile Delhi Vidyut Board (DVB).

According to the petition, the past practice of sharing 50% of the electrification charges was inpursuance of the agreement existing between the civic body and DVB. The present discoms towhom the management control had been transferred being private parties are no longergovernment entities, and, therefore, the past practice will not apply to the parties in the presentcase, it stated. The state commission had fixed the price and framed regulations whichmandated the sharing of the cost of providing electricity in 50:50 ratio.

BSES Yamuna Power enters into a memorandum of understandingwith Indian Institute of Technology - Delhi 7/14/201012:00:00 AM

In a bid to foster research in the power distribution sector, BSES Yamuna Power Ltd (BYPL),one of the three distribution utilities operating in the Capital, has entered into a memorandum ofunderstanding (MoU) with the Indian Institute of Technology Delhi. The collaborative initiativewill focus on providing better value proposition for the consumers by minimising variability of

services through technological and R&D interventions. This will by done by devising ways to notonly further improve the quality and reliability of power supply, but also finding newer methods toreduce transmission and distribution losses, a BSES release said. An agreement to this effectwas signed on Monday by Mr Ramesh Narayanan, CEO, BYPL and Dr Anil Wali, ManagingDirector, Foundation for Innovation and Technology Transfer (FITT) a society established byIIT-Delhi for enhancing industry-academia interactions and cutting edge research. The initialduration of the MoU will be for a period of three years.


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Delhi's power regulator DERC writes to all three private discomsrejecting point-by-point all their arguments demanding anincreasing in rates

6/1/201012:00:00 AM

Hardening its position in the ongoing face off over the power tariff dispute, Delhi's powerregulator DERC has shot off letters to all three private discoms rejecting point-by-point all theirarguments demanding an increasing in the rates. The Delhi Electricity Regulatory Commissionalso sent a letter to the government, believed to be sympathetic to the demands by the discoms,strongly objecting to any hike in tariff. The letters to discoms as well as to the government fromthe DERC came days after a top official in the Chief Minister's office said genuine demands ofthe discoms must be addressed by the regulator while finalising the new electricity rates.

In its letter to Tata-backed discom NDPL, the DERC said the company made a profit of Rs468.82 crore in 2009-10 which increased from 169.60 crore in 2004-05, an increase of 176 percent. The regulator also charged NDPL of giving "figures without any basis" in its representationto the government demanding a hike while "ignoring the fact that the audited accounts for 2009-10 showed a cash profit of Rs 468.82 crores.

Also rejecting the discom's contention that banks have refused to lend money to the company forits poor financial position, DERC said credit rating agency ICRA has given NDPL high creditquality rating for its healthy financial position. "The positive credit profile also favourably factorsin the stable demand growth and low level of business risks in its core operations' and itsimproving financial risk profile," it said.

Exercising a special power under Delhi Electricity Act, the city government after receiving arepresentation from the discoms had on May 4 -- a day before the scheduled announcement ofthe tariff order -- directed DERC not to announce it till the regulator got the go-ahead from it. TheDERC after receiving the government directive had indicated that it had planned to cut down thetariff by 20 to 25 per cent as discoms would have a surplus of around Rs 4,000 crore if theexisting tariff was not tinkered with.

In its letter to BSES Yamuna Power Ltd, DERC said the company made "highest cash profit ofRs 157.33 Crore in 2009-10 which increased from 16.89 Crore in 2007-08". The DERC also

accused BYPL of misrepresenting facts not giving proper figures in its representation to DelhiGovernment seeking hike in tariff. "Despite good financial position of your company and fairlygood credit rating, you have chosen to say, in your representation, that your net worth isnegative," DERC said in the letter. A similar letter was sent to BSES Rajdhani Power Ltd also bythe DERC.

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