Reallocation Of Power Quota Likely

The National Task Force on Tariff, which meets in Delhi on October 7, will consider allocation of central sector power surrendered by eastern region power agencies to other regions.

Several power agencies in the eastern region have expressed willingness to surrender a portion of their quota of central sector power following a similar move by Damodar Valley Corporation (DVC).

The power agencies will have the option of restoring the surrendered quota after two years. This will benefit both the quota holders and central sector power agencies.

DVC applied for a cut in its quota in July and was allowed a reduction. Both DVC and the West Bengal State Electricity Board (WBSEB) had refused to accept any share of power generated at the Talcher thermal power station of the National Thermal Power Corporation (NTPC) which was commissioned two years back. They, however, have quotas of central sector power from NTPC's two other eastern region plants at Farakka and Kahelgaon besides the Chukha hydroelectric power station in Bhutan.

Though DVC had asked for a reduction of its thermal power quota, the Central Electricity Authority (CEA) suggested that a reduction in quota must include shares from all the three sources of central sector power at Farakka, Kahelgaon and Chukha.

The surrendered DVC share of Chukha power has been reallocated to other eastern region power agencies. Since the Chukha is the cheapest of all central sector power sources, the eastern power agencies are happy with the enhancement of Chukha power share. WBSEB, for example, has got its share raised from 29 to 37 per cent.

Other eastern region power agencies like the WBSEB and Gridco have also expressed willingness to similarly surrender a portion of their allocation of central sector power.

They have both increased their own generation and are keen to generate more from their own sources. A higher NTPC power share means paying of similar proportion of fixed charge. Even if they draw less NTPC power, they have to pay for the fixed charge of even the idled NTPC capacity in proportion to their allocation. Larger drawal will idle their own capacity. So, they are looking for a wayout through surrender of a portion of their quota.

NTPC, however, is not happy with the development. It is afraid that the reallocation of the surrendered quota to states outside the eastern region depends on the inter-region power transmission capacity. This region's links with other regions are almost fully booked. So, the surrendered quota may remain unallocated till more inter-regional transmission links come up.

So, NTPC will not be able to recover fixed charges for the unallocated quota.

The NTF at its meeting on October 7 will consider both the offers of quota surrender and NTPC's objections to it. But, it will be difficult for CEA to reject the quota surrender proposals having accepted DVC's offer.