Selling power direct to customers in Gujarat

Vol 5, PW 8 (06 Jun 01) Midstream & Downstream

If approved, it could have ramifications across the power sector in India.

We understand the Gujarat Electricity Regulatory Commission is preparing a proposal to allow three local power generation companies to sell direct to consumers, bypassing the bankrupt Gujarat Electricity Board. Essar Power - 515-MW plant at Hazira Gujarat Powergen Energy Corporation - (owned by China Light & Power) - 655-MW plant at Paguthan Gujarat Industrial Power Company This is the first time a state regulatory commission in India will be submitting such a proposal, and first indications are that the Gujarat government will respond positively.

But can it become reality Under the Central Electricity Act, Independent Power Producers must only sell power to SEBs under the terms of a Power Purchase Agreement. One local analyst tells Petrowatch they would only be able to sell direct to customers if the Central Electricity Act is reformed in Delhi - a process that could take months if not years.

Another analyst said Gujarat can order IPPs to sell direct to customers in defiance of Delhi, much as they passed the Gujarat Gas Act in contravention of diktats from the oil ministry. It is widely accepted that Indian SEBs are bankrupt - the Gujarat Electricity Board is no exception.