BHUBANESWAR: The decision of Odisha Electricity Regulatory Commission (OERC) to convert Vedanta’s 600 MW Unit-II power plant at Jharsuguda from independent to captive generating unit depriving Odisha its share of 30 per cent cheaper power was found ‘erroneous’ by the same panel.
Allowing the petition of Grid Corporation of Odisha Limited (Gridco) for a review of the commission’s October 5, 2021 order in which the regulatory body had gone out of way to show favour to Vedanta Limited, a three-member panel chaired by Suresh Chandra Mohapatra said the order issued then was patently unfair.
“...the direction issued by vide the order dated 05.10.2021 that the Unit-II of M/S Vedanta Ltd shall normally operate as CGP, and the consequential directions are found to be patently and self-evidently erroneous,” the May 3 order of OERC said.
The order further said Vedanta will comply with the requirement of supplying power to Gridco as per terms and conditions of power purchase agreement (PPA) it had entered into with the state power trading utility on December 1, 2012 which is for a tenure of 25 years. Besides, Vedanta had also given a written undertaking through a affidavit to the commission to the effect that it will comply with the requirement of supplying power to Gridco as per the terms and conditions of the PPA, it added.
The then panel headed by UN Behera had allowed the second unit of Vedanta’s Jharsuguda power plant (4 X 600 MW) to operate as a CGP against its status of an IPP to enable the company meet the power needs of its aluminium smelter unit ignoring objection from Gridco and state government. The petitioner had prayed the commission to declare IPP Unit-II (600 MW) of its power plant as a CGP unit and also to declare it will have no obligation to supply power under PPA with Gridco signed on December 19, 2012 and the terms of PPA comes to an end.
Curiously, the then commission justified its order for converting the Unit-II to CGP on the argument that Gridco will save Rs 277 crore annually it surrenders the allocated power from the CGP without taking views of the state utility.
A fresh calculation by the commission headed by Mohapatra found Gridco will sustain a losses of around Rs 155 crore annually if it does not procure the power.Earlier, on January 27, 2016 the commission had approved the proposal of Vedanta for conversion of I, III and IV units of the power plant to CGP with effect from April 1, 2015.