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the basis of an absolute power flow of 30 MW over contracted path. The Board has estimated the energy losses @ 8% on pooled basis in the EHT system at 66 kV and above.

Based on the information furnished by the KSEB , the Commission has found that presently the power is flowing from Lower Periyar/Idukki to Madakkathara and from Madakkathara to northern Kerala under all operating conditions. This situation is likely to continue even after commissioning of the 400 kV Madurai-Thiruvananthapuram line. Import of 30 MW of power for Indal would therefore reduce the flow over the 220 kV Lower Periyar-Madakkathara and Idukki-Madakkathara lines. Thus there would be a reduction in the losses of the KSEB system due to the import of 30 MW power by Indal. However, the system conditions would not remain constant and might vary in accordance with the changes in system configuration and generation capacity additions. The Commission is therefore of the view that it would be necessary to keep an allowance to take care of the changing system conditions. As the loss worked out on contracted path basis is the lowest, it would be appropriate to adopt such a loss figure for this purpose. The Commission is however inclined to round off this figure to 3% since the calculation to arrive at a loss figure of 2.54% was made on the basis of absolute power flow and not on the basis of incremental power flow. The Commission is therefore of the view that the Board should be compensated for transmission losses to the extent of 3% of the energy transmitted.

3.7 As regards the surcharge on transmission charges, the petitioner has argued that since the average cost of supply by the Board is Rs. 3.99/kWh which is higher than the average tariff for Indal, the petitioner was not cross subsidizing any other type of consumer, and therefore no surcharge should be levied. The Board, on the other hand, maintained that average energy charges for Indal worked out to Rs 3.36 kWh while the average realization by KSEB was Rs 2.96/kWh and there was cross subsidization to the extent of Ps 40/kWh. Therefore the surcharge should be levied @ Ps 40/kWh. The Board has subsequently revised this figure to Ps.88/96.

The Commission is not in a position to accept both the above arguments. By definition, cross subsidy is the difference between the tariff for the consumer and the actual cost of supply to the consumer, if the former is higher than the latter. Although the Commission has sought the information regarding the cost of supply to EHT consumers

at 110 kV, the KSEB was not in a position to furnish the same due

asked for one year Commission is not in cross subsidy.

time to work out a position to decide





the rate of surcharge based

to lack of data and circumstances, the on the current level

The Commission recognizes the fact that in deciding the various charges related to the import of 30 MW power by Indal, it has to strike a balance between two conflicting interests. Any adverse effect on the finances of the KSEB due to the transaction is detrimental to power development in the State. The continued closure of the smelter plant and the subsequent total closure of Indal would adversely affect the climate for industrial development with consequent setback to power development in the State. This

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