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KERALA STATE ELECTRICITY REGULATORY COMMISSION THIRUVANANTHAPURAM 695 003 - page 5 / 14

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5

southern part of the State with consequent reduction in the power flow from southern part

to Madakkathara. even if the losses

On account of this, there were calculated on the

would

be

basis

of

reduction in losses. However, contracted path method from

Madakkathara to Alupuram, the actual loss would work out only petitioner therefore pleaded that the transmission losses should not be 2.54%.

to 2.54%.

The

fixed higher

than

As regards the demand for surcharge towards cross subsidy, the petitioner stated that the question would arise only when the tariff of a particular category of consumer was more than the average cost of supply. Since the KSEB's average cost of supply and the petitioner's tariff were stated to be Rs 3.99/kWh and Rs 3.38/kWh respectively, the petitioner was not liable to pay any surcharge towards cross subsidy. The petitioner further stated that presently KSEB was meeting its demand partly through power purchase. The cost of power purchase in certain cases was as high as Rs 4.50 /kWh. Hence if 30 MW power was wheeled to the petitioner from outside the State, the KSEB could reduce the power purchase to the same extent from costly sources. Thus, the KSEB would stand to gain to the extent of Rs 1.12 per kWh (Rs 4.50 - Rs 3.38) during the operation of wheeling of power to the petitioner. The petitioner, therefore, stated that even if it was admitted for the sake of argument that there was a loss of Ps 42/kWh on account of cross subsidy factor, the loss would be well compensated by the gain of Rs 1.12 per kWh through reduction of purchase of costliest power. The petitioner therefore pleaded for exemption from payment of surcharge towards cross subsidy. The petitioner also argued against the additional surcharge as the entire demand of the petitioner would be met by PTC continuously and no additional facility was needed to be created for the proposed wheeling of 30 MW of power.

2.3

The representatives of the workers' Union of Indal stated that the production in

the plant was getting affected due to the frequent revision in the power tariff by the KSEB and Indal was scaling down production through gradual layoffs. The operation of the smelter plant has been totally stopped with effect from 1.8.2003. Indal is presently

of

5 MW.

to

a stop in

The

workers

course

of time.

with power intake operation may come

maintaining apprehended

only that

marginal operations even this small scale

As a result affect about

of this, about 1000 workers would 5000 affiliated families. This may

become jobless which might adversely affect the industrial climate of the State

besides loss of direct and crores per annum. Closure

indirect

revenue to the

of Indal

may also come

Government to the extent of Rs in the way of flow of investment

80 for

new industrial ventures in the State. for every possible action on the part

The representatives of the Workers' of the Commission, Government of

unions

pleaded

Kerala

and the

KSEB in restarting the smelter plant, as early as possible.

2.4

The representative of the Government of Kerala stated that the State Government

had no objection in permitting open access to the transmission system of KSEB for delivering power to Indal by PTC subject to technical suitability of the proposal. The Government representative stated that the Commission might decide the wheeling and

other charges applicable to the case.

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