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KERALA STATE ELECTRICITY REGULATORY COMMISSION THIRUVANANTHAPURAM 695 003 - page 8 / 14

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8

through the Edemon-Sabarigiri-Pallom-Brahmapuram-Kalamassery-Indal

feeders

and

also the details of arriving at the cost per km of 220 kV and 110kV lines considered by the KSEB in working out the transmission charges. KSEB was also asked to furnish the details of other assumptions made in the letter including the cost of supply to Indal when

the KSEB was supplying power. The KSEB has not yet furnished these details.

3. Commission's Findings:

3.1

Indal has closed down the smelter plant with effect from 1.8.2003 and reduced its

power intake from 30 MW to 5 MW. This development is a matter of serious concern to the Commission as the KSE Board has lost a major industrial consumer and it will further aggravate the already strained finances of the KSEB. The reduction in revenue collection by the KSEB on account of the closure of smelter plant is estimated to be around Rs. 5.5 crores per month on an average. The average realization from Indal was Rs.. 3.38 per kWh excluding electricity duty of Ps. 1/kWh and surcharge of Ps. 2.5 per kWh. The present level average realization by KSEB per kWh of energy sold is Rs. 2.96. Therefore the loss to KSEB due to the closure of Indal or grant of permission to Indal for availing power from PTC as requested in the petition of Indal would be Ps 42 per kWh of the energy consumption of the smelter plant. The KSEB has not indicated any strategy to deal with the situation arising out of the closure of Indal, even though the Commission

had made a specific reference to the Board in this regard.

3.2

During the hearing, the representative of the Government of Kerala conveyed

no objection determination

to of

the proposal for open access subject to technical transmission charges, etc., by the Commission. The

suitability and KSE Board, in

written response earlier had to Indal, citing transmission

expressed constraint

reservations regarding permission of as the reason. However, during the

open access hearing, the

representatives of the KSEB expressed the view that since the additional import to the extent of 30 MW, the Board would not object to granting permission to importing this quantum of power from PTC.

was only Indal for

3.3 Under Subsection (2) (d) (ii) of section 39 and Subsection (2) of Section 42 of the Electricity Act, 2003, the Commission is vested with the authority to introduce open access for using the transmission system by a licensee or consumer and the Act allows sufficient time to the Commission for introduction of open access after framing regulations thereof. In the present case, Indal has surrendered the power and the smelter unit has become inoperative. It would appear that the smelter unit may get ultimately closed, if open access is not allowed. The Commission views this as an unprecedented and extraordinary situation warranting immediate decision, in the matter, by the Commission. During the hearing, the Government of Kerala and the KSEB have given in principle clearance for import of power by Indal from PTC using the transmission system of KSEB. Under the circumstances, the commission is inclined to allow open access to the transmission system of KSEB for use by Indal for transmitting the power purchased from PTC on an experimental basis. The Commission is therefore required to determine the charges to be paid by Indal to KSEB for such usage of the transmission system.

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