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Private power cos allowed to sell over 1MW directly to firms

Private power cos allowed to sell over 1MW directly to firms New Delhi: After nearly a decade, the Tamil Nadu government has allowed private power companies based in the state to sell more than 1MW of power directly to industrial consumers.

Energy department secretary Vikram Kapur issued an order a few days ago allowing the companies to sell power after paying the wheeling and cross subsidy surcharge to Tangedco.

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The decision was taken owing to the availability of surplus power, with supply likely to rise in a few days when the wind season begins. A decision not to allow private companies to sell more than 1MW power directly to consumers was taken in 2009 as there was a power shortage.

The energy department issued the policy order even as Tangedco’s appeal in this regard is pending with the Tamil Nadu Energy Regulatory Commission (TNERC). “The government after careful examination has decided to accept the proposal of Tangedco’s chairman and issue a policy directive under the Electricity Act to amend the TNERC regulation on allowing open access to the consumer with a load of 1 MW and above,” said the order.

The latest government decision to allow open access sale of power is likely to be a boon for private power companies as Tangedco is not evacuating power from these companies to the maximum capacity.

“It is a good decision as many private companies are not generating power to their full capacity. Tangedco is evacuating power from various sources based on the merit order (lower tariff to higher). As the tariff of private companies is a little high, only a few MW of power are being evacuated by Tangedco,” said a senior official of a private power company.

But private companies want the government to lower the cross subsidy surcharge.

“It is only in Tamil Nadu that the cross subsidy surcharge is as high as Rs 3 per unit. Though as per the Electricity Act, the surcharge must come down to nil, in Tamil Nadu it is being collected from private generators. The open access order will benefit us only if the surcharge is lowered,” said the official.

Tangedco says the decision to lower the cross subsidy surcharge depends on the TNERC. “Even last year, we lowered the surcharge and a decision on any further reduction will have to be taken by TNERC,” said a Tangedco official.

This story has not been edited by coalpost and is auto-generated from a syndicated feed of ET https://energy.economictimes.indiatimes.com/news/power/private-power-cos-allowed-to-sell-over-1mw-directly-to-firms/63865892?utm_source=RSS&utm_medium=ETRSS