Rpg Power Utility Gets More Areas For Distribution
The Uttar Pradesh State Electricity Board has assigned some more areas to Noida Power Company (NPC) a power utility owned by the RPG group for distribution. This will increase the connected load of the utility from 22 mw to 45 mw.
NPC has also finalised plans to set up a naphtha-based combined-cycle power plant in its licensed area to generate 100 mw. The plant will meet the entire demand in the companys licensed area and supply the surplus generation to the Uttar Pradesh SEB.
In contrast, CESC Ltd, the biggest power utility of the RPG group, has just lost control of the two gas turbines leased from the West Bengal SEB. The two 20-mw turbines had been leased by the SEB to CESC five years ago and the licence was extended by a year.
CESC wanted to run the turbines during evening peak hours until its 500-mw Budge Budge thermal power project was fully commissioned. But the SEB decided not to renew the lease, although the first unit of 250 mw at Budge Budge is unlikely to start commercial generation before the year-end.
NPC was the first venture of RPG Power Engineering Company wholly owned by RPG Enterprise which is expected to be the holding company for all power sector ventures of the group. It already has a 780-mw naphtha-based Dholpur power project in Rajasthan, scheduled to go on stream by December 1999, and the 78-mw Kasargod project based on heavy fuel oil in Kerala, which is slated to be commissioned in June 1999.
The request of NPC for an expansion of its licensed area came as a surprise as the company has accumulated losses of Rs 2 crore since taking up power distribution in Noida in December 1993. It is making losses despite enjoying an enviable consumer profile of 70 per cent in the industry sector.
The company has been selling about 300 million units a year.
The company, however, does not have the freedom to fix its own tariff. Its agreement with the UP power board stipulates that the company must follow the SEBs tariff structure.
Despite a good rate of tariff for industrial consumers, the company suffers heavy losses on supply of power to the rest of the consumers, especially the domestic category, who pay a fixed monthly rate because the supply is not metered.
It is not clear how the company hopes to make profits by doubling the connected load. It is still paying the UP board against assets acquired. It has so far paid Rs 7.5 crore and has to pay another Rs 2.5 crore.
The NPC-UPSEB agreement initially for five years also requires NPC to invest in strengthening the Noida distribution network. The company is believed to have spent nearly Rs 10 crore for this purpose.
NPC expects to make profits once its new power plant is commissioned. It also hopes to benefit by tariff revisions by the UP board.