Odisha Energy Minister writes to Centre over reduction of inter-state electricity transmission charges

Bhubaneswar (Odisha) [India], April 30 (ANI): Odisha Energy Minister Captain Dibya Shankar Mishra wrote to Union Power Minister Raj Kumar Singh requesting him to address the issues resulting in a steep rise in transmission charges of Power Grid Corporation of India Limited (PGCIL).
In a release, the state government said Odisha meets most of its power demand from the sources located inside the state. However, it avails the necessary additional quantum from the Central generating stations located outside the state through the central transmission network of PGCIL paying necessary transmission charges.
"Over the past decade, it is observed that the national average of PGCIL transmission charges, which were in the range of 24 paise per unit in FY 2011-12 gone up to 85 paise per unit in FY 2019-20 with a CAGR of 17 per cent, which is very high," the Odisha government said.
It said that the National Electricity Policy and Tariff Policy mandate the transmission tariff mechanism to be sensitive to distance, direction and related to the quantum of flow, that is, to be based on the actual utilization of the transmission system.
"However, despite several amendments of CERC Sharing of Transmission Charges and Losses Regulations, there has been a continuous and steep rise in transmission tariffs for states like Odisha, who have ironically got most of the generators inside the state," the government said.
"After the grid disturbances of July 30-31, 2012, a huge number of Transmission System Assets was added for bringing stability to the system, leading to a considerable percentage of Transmission Assets remaining idle and underutilized, and thus increasing the Transmission Charges," it said.
According to the state government, the cost of Transmission Assets discovered through competitive bidding are significantly lower than the cost determined under-regulated (Cost-Plus) mechanism.
"As a combined effect of huge underutilized capacity addition and price determined through Cost-Plus method, the Annual Revenue Requirement (ARR) of PGCIL for FY 2019-20 has increased to Rs 39,000 Crore from Rs 9,000 Crore in FY 2011-12 with a CAGR of 21 per cent. In addition to these reasons, the approach to uniform pricing in sharing of inter-state transmission charges have led to an increase in total transmission charges for Odisha, from Rs 179 Crore in FY 2011-12 to Rs 734 Crore in FY 2019-20 at a CAGR of 19 per cent, resulting in a rise of per unit transmission charges from 24 paise to 102 paise during the said period," the release noted.
As a remedial measure, the Odisha Energy Minister in his letter to the Ministry of Power suggested not to pass on the financial impact of any underutilised infrastructure to the consumers and proposed for funding of the same through some government fund, like Power System Development Fund (PSDF).
He also requested the Union Power Minister to issue an advisory to the Central Electricity Regulatory Commission under Section 107 of the Electricity Act, 2003 to review and align Sharing of Transmission Charges Regulations with the principles of National Electricity Policy and Tariff Policy. (ANI)