Odisha, India: OERC’s positive move benefits the aluminium industry and state

The Odisha Electricity Regulatory Commission’s positive move by allowing one unit of Vedanta IPP adding to the surplus power within the state to utilize its power for aluminium production within the state which would be developing thousands of employment in and around Jharsuguda.

As a judicial body, OERC has given a statement and accordingly the difference of opinion delivered by all the stakeholders, including GRIDCO, Government of Odisha and others have been considered and eventually a fair and logical order has been given in the interest of the state and consumers.  The order of OERC permits GRIDCO to draw power when actually in deficit and allow IPP power to be used in the state when there is a power surplus situation.

A comprehensive review of the order distinctly manifests that after analysing all the arguments OERC has brought out the facts and figures about public utility GRIDCO and the consumers at large would benefit from permitting power from unit 2 IPP of Vedanta to be consumed for the production of aluminium in the Odisha.

However, it is significant that IPP- CPP transformation has been undertaken for various other plants in the country by the Appellate (APTEL) authority like APTEL order of 2010 for Hira Ferro Alloys, APTEL order in 2011 for Urla Industries Association.

This has been brought out within OERC order that it would benefit GRIDCO and the state by about INR 277 crore as the state is in surplus and getting more and cheaper RE power.

OERC order reveals: “Even if GRIDCO does not draw power from the above-mentioned power stations at the margin, still GRIDCO has to pay a full fixed cost to the NTPC stations as per existing PPAs. In future, if GRIDCO needs more power than the present estimated State requirement, then it may draw the unscheduled power from those power stations, which are presently beyond the merit order, i.e., TSTPS-II(partially), KHSTPS-II, FSTPS-III. For these central stations, fixed costs are to be paid irrespective of a drawl from them. However, if GRIDCO surrenders M/s Vedanta power, they won’t have to pay the fixed cost of INR 399.42 crores at 85% of availability.”

The industry experts commented by saying on this development that in a better way, OERC has played a vital role for the consumers of the state by narrowing the burden of INR 277.7 crore of unneeded power purchase cost that would have overloaded the consumer tariff.

The one outstanding reason for the state of Odisha to develop as an investor’s choice destination for investment is by transforming its position to surplus in power. The pleasant power situation associated with ease of doing business and stable government has built up an appropriate business environment for growth and development.