Karnataka Power Board Seeks Licence Exemption

In a far-reaching move, the Karnataka Power Transmission Corporation Ltd (KPTCL), the state electricity board, has asked the state regulatory body to exempt itself from the purview of the licensing arrangement.

In a letter to the Karnataka Electricity Regulatory Commission (KERC), KPTCL has sought exemption of getting licence under certain provisions of the Karnataka Electricity Reforms Act. The exemption allows the electricity board to be out of the provisions of the electricity Act, fix its own tariff, transmit electricity, and enter into power purchase agreements without seeking the approval of the regulatory commission.

The KERC has, however, shot of a letter to the KPTCL seeking clarifications on the issue including whether such a proposal has the approval of the board of the corporation and the Karnataka government. "The very purpose of having a regulatory body gets defeated by such a move," KERC Chairman Phillipose Mathai said. However, no comments were available from KPTCL officials.

 

The letter by KPTCL states says the corporation had earlier submitted the provisional transmission and bulk supply licence as well as distribution and retail supply licence for grant of licence. "Being an organisation succeeding KEB (Karnataka Electricity Board) and owning the entire transmission and distribution networks in Karnataka entrusted with the functions, duties rights and power of KEB may not be saddled with all the procedures of licensing and hence needs to be exempted from the obligations of getting licence under Section 20 of Reforms Act with Regulation 23 of the Regulation."

Section 20, power reforms Act, allows the commission to exempt from the requirement to have licence in case the energy is to be supplied to any cantonment, aerodrome, dockyard or by a captive generation provider who wants to supply to a particular area.

Mathai said the state transmission body cannot be allowed such an exemption because it encompasses the entire operations in the state. In its letter to the KPTCL, the commission has sought clarifications on the following issues: whether the proposal has the approval of the chairman and managing director of the corporation; whether the board of KPTCL has taken a decision to make such an application and whether the Karnataka government as the sole shareholder of KPTCL has approved the proposal for seeking exemption under Section 20 of the Reforms Act.

The licence puts certain conditions on the part of the operator which include, complying with any direction of the commission, Act in accordance with the terms of the licence, furnish all information, documents and details as required by the commission, comply with the requirements of the Indian Electricity Act and Electricity (supply) Act, purchase power in an economical manner and under transparent power purchase procurement process.

The licence also allows the holder to establish a tariff or to calculate its charges from time to time in accordance with the requirements specified by the commission. The KERC has the powers to regulate the purchase, distribution, supply and utilisation of electricity and the tariff. The Commission also has the powers to issue licences and to regulate the working of the licensees.