Essar Proj applies for power distribution licence for Gurgaon

Grant of the licence will make the company the second distribution licence holder after DHBVN

Essar group company Essar Projects has sought licence to distribute power in municipal area of Gurgaon in Haryana as the second energy supplier in the district, a government official said.

"Essar Projects (India) Limited has applied for electricity distribution licence in the area of Gurgaon municipal corporation for a period of 25 years," Haryana Electricity Regulatory Commission, Director (Tariff), Sanjay Varma said here today.

If the licence is granted to Essar Projects, then it will be the second distribution licence holder after DHBVN for supplying power to energy consumers within municipal limits of Gurgaon.

Already state-owned Dakshin Haryana Bijli Vitran Nigam (DHBVN) is supplying power in its Gurgaon circle.

In Haryana, only two state-owned Uttar Haryana Bijli Vitran Nigam and DHBVN are supplying power to consumers.

Pegging the capital outlay on this project at Rs 1,519 crore, the company in its application has said that it would set up its own distribution network for supplying power to the consumers.

"The company will have its own power infrastructure to supply power which means it will not use distribution network of DHBVN which is already supplying power," said Varma.

The company has kept the cost of power from own generation and purchase at Rs 5.19 per unit with hike of 3-4% per annum.

Varma said the Electricity Act, 2003 provides for second power distribution licence provided the company has its own power distribution related infrastructure.

"Therefore, there is no need to take permission for seeking licence from Haryana government," he clarified.

HERC has sought the objections and suggestion from various stakeholders including power consumers, industry associations, residents welfare associations with regard to the application for grant of second distribution licence in the Gurgaon Municipal Corporation area.

Giving an example of two power distribution holders, Varma informed that in Jamshedpur, the state-owned electricity power distribution company and a private company Jusco are supplying power.

Gurgaon circle is a very potential area in terms of revenue generation and consumer load. DHBVN generates almost 50% of its revenue from Gurgaon circle only out of its total five circles. It fetched a revenue of Rs 336 crore last month from Gurgaon circle out of total revenue of Rs 722 crore.

Gurgoan has power consumer base of 3.60 lakh with average power load of 700-800 MW.