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CERC rules transmission system is ‘not required’

According to reports, dogged by lack of fuel to fire the plant, Reliance Power’s 2,400 MW gas-based power project at Samalkot, Andhra Pradesh, now faces another problem — how to evacuate the electricity it eventually generates.

The Central Electricity Regulatory Commission (CERC) has ruled that the proposed transmission system — the Vemagiri Transmission System — meant to evacuate power from the station, is “not required.”

The CERC based its conclusion on the uncertainties over fuel affecting the gas-based projects in the area, as well as the lack of sufficient load. The transmission system was supposed to evacuate power generated by Reliance Power as well Spectrum Power Generation’s project in the same area.

However, Reliance Power maintains that the order scrapping the transmission system, which Power Grid Corporation of India Ltd was to have implemented, will have no impact on the project.

A Reliance Power spokesperson said: “There is enough capacity available for evacuating power from the Samalkot project. Two years ago, the Vemagiri Transmission line was essential to evacuate power from the projects in the area. However, the situation has undergone a significant change since then as new transmission lines are being implemented by APTransco as well as PowerGrid, in Andhra Pradesh.”

Industry observers point out that the development of the grid is not specifically linked to either Reliance or Spectrum’s projects. Sources also said that tying up the transmission network will require at least a month, if the lines existed, but in this case (Vemagiri projects) even the feeder line to the grid is not available.

The two companies — Samalkot Power and Spectrum Power — have been directed to refund the contract performance guarantees extended by Central Transmission Utility (CTU), amounting Rs 22.31 crore and Rs 13.69 crore, respectively. CTU has also been asked to refund the bank guarantees it had obtained from the generating utilities (Samalkot, Rs 110 core and Spectrum, Rs 67.50 crore).

Earlier, Spectrum had approached CERC to terminate the transmission service agreement on the ground that it would not be able to set up the power project because of non-availability of gas. Reliance Power did not envisage any such problem, but declined to bear the entire transmission charges after the exit of Spectrum.

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