February 15, 2013

Power Grid Corporation of India Ltd (PGCIL) has put up a proposal to acquire wire business license within the jurisdiction area of Central Electricity Supply Utility, a power distribution company (discom) in Odisha.

As per the proposal, PGCIL will invest in setting up new infrastructure within CESU (about six districts) area and claim wheeling and other charges for its service.

“This is the first time PGCIL have proposed to acquire wire business license in CESU area. Since the company is currently preparing detailed project report, the investment details and business plans cannot be disclosed,” according to sources.

CESU is one of the four discoms operating in Odisha. It is currently being managed by Odisha Electricity Regulatory Commission (OERC) after its majority stake holder, AES, unilaterally abandoned the management a decade back.

PGCIL application to acquire the wire business license has been sent to OERC for clearance. As per the business model proposed by PGCIL, apart from upgrading existing network of CESU, it will set up power substations and 33 KV cables lines.

CESU currently has about 2,900 CKT kilometer 33 KV lines. As per an estimate, it will be requiring around 62 power substations and 600 CKT km lines in next five years.

PGCIL has been aggressively planning to invest in Odisha, as the state is going to generate around 40,000 MW power from 29 Independent power producers (IPP) and three Ultra Mega Power Projects expected to be commissioned in next 10 years.

Recently, it had joined hands with Odisha Power Transmission Corporation Ltd (OPTCL) to form a JV to develop transmission lines in the state. Out of Rs 2,000 crore proposed investment, both the promoters would provide about Rs 200 crore each and rest Rs 1,600 crore would be met thorough loans.