Copy of letter by Orissa power minister to Union power minister

VOICE OF ELECTRICITY WORKERS

July 2005 - September 2005 Index

SHRI SURJYA NARAYAN PATRO 6290

MINISTER 30/05/05

Energy, Information Technology

and Tourism, Orissa

Sub: Extension of time for separation of Transmission

function from Bulk Supply and Trading functions.

Dear Sri P.M. Sayeed Jee,

As you know the Electricity Act 2003 has come into force with effect from 10.6.2003. Section 39 of the said Act provides that “the State Government may notify the Board or a Government Company as the State Transmission Utility, provided that the State Transmission Utility shall not engage in the business and trading in Electricity”. After implementation of Power Sector Reform in Orissa, Grid Corporation of Orissa Ltd., a Govt. Company has been entrusted with both Transmission function and Bulk Power Trading function. As per Electricity Act 2003 these two functions should be separated.

In exercise of power conferred under section 183 of Electricity Act 2003, the Government of India in the Ministry of Power, have authorized the State Transmission Utility namely GRIDCO to engage in the activity of Bulk purchase and sale of electricity to the Distribution Companies in the State and trading surplus power outside the State for a further period of one year from the 10^th June 2004. But after 10^th June 2005, GRIDCO will not be able to engage both in trading and transmission of electricity.

In this connection, it may be states that the transfer of Transmission assets and liabilities of GRIDCO to a newly formed Transmission Company and separation of Trading and Transmission activities will require some more time.

It is seen from your letter to Shri. A.B. Bardhan and others dated 17.5.05, that a decision has been taken by the Ministry of Power, Government of India, to extend the date for separation by a period of 6 months beyond 9.6.2005 under Sec 172(a) of Electricity Act for SEBs who are yet to unbundle their transmission, distribution and generation business.

The State of Orissa is much ahead in the process of Reforms and has unbundled the SEBs, in to separate units since 1.4.1996. The distribution sector has been privatized since April 1999. Reassignment of PPA signed by Gridco with the generators to the privatized DISTCOs will take some time. It will be discriminate, if Gridco is not given further time to separate its trading from transmission business as contemplated for other SEBs.

Under this circumstances, it is requested that at least one years time i.e. upto 9^th June 2006 may be granted in favour of GRIDCO to separate the transmission functions from trading functions.

With regards,

Yours sincerely,

Sd/-

(S.N.Patro)

Shri P.M. Sayeed,

Union Minister for Power,

Government of India,

Shram Shakti Bhawan, Rafi Marg,

New Delhi – 110 001.


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