CASE NO. 10 of 1997

ORDER No.003 DATED 6th JUNE, 1997

Shri A. R. Mohanty, Member
Shri D. K. Roy, Member

In the matter of application of M/s Indian Aluminium Company Limited, Hirakud, District: Sambalpur for setting up a Captive Power Plant.

M/s Indian Aluminium Company Limited - Petitioner

For the Petitioner:
Shri B.K. Pattnaik, General Manager(Co-ordination).
Shri G. Samantaray, Executive Co-ordinator.

For the affected party:
Shri N.G. Nath, S.E.(PP-I), GRIDCO.
Shri D.K. Satpathy, Manager (PP-I), GRIDCO.

1. A petition was filed by M/s. Indian Aluminium Company Limited (INDAL) seeking consent under Section 44 of the Electricity Supply Act, 1948 (hereinafter referred to as Supply Act) read with sub-section (3) of Section 21 of Orissa Electricity Reform Act, 1995 (for short the Act) for setting up a Captive Power Plant.

2. At present, M/s. INDAL operates 30,000 tonnes per annum aluminum smelter plant at Hirakud. Electrical power for this smelter plant is made available from its own captive power plant of 67.5 MW capacity located adjacent to the smelter plant and partly it-avails power supply from the GRIDCO. Their parallel operation of captive plant with GRIDCO results annually, an exchange of power of about 35 MU into Grid and INDAL is receiving about 80 MU as backup power from the Grid for their smelter. They have now proposed to expand this smelter plant to a capacity of 64,000 tonnes per annum and consequently, expansion of their captive plant with addition of 77 MW single turbine generator set with three numbers of circulating type fluidised bed hollers. The petitioner has mentioned that with this proposed installation of their captive generator they would not he requiring any backup power assistance from GRIDCO. There would be however some surplus generation capacity of 300 MU annually.

3. The above application was decided to be disposed of through a proceeding and a Case No 10 of 1997 was assigned for the purpose. Notice was served on M/s. INDAL, the applicant and on M/s. GRIDCO, the affected party, for personal hearing on 20.05.97. Counter was filed by GRIDCO on 09.05.97. In response to the notice, the petitioner and GRIDCO appeared on 20th May, 1997 through their representatives as indicated earlier.

4. M/s. GRIDCO in their counter indicated that the proposition of linking both the 132 KV feeders of GRIDCO at the proposed 132 KV double bus of INDAL by 132 KV XLPE cable would increase the fault level. During the hearing, the representative of M/s INDAL agreed to meet the reasonable cost necessary for upgradation of the equipments of GRIDCO arising out of higher fault level confirmed through a system study. Meeting such liability by the applicant is reasonable as utility or GRIDCO should not be burdened with any extra liability due to the applicant's interconnection of captive power plant.

5. M/s. INDAL in their financial analysis submitted through their project report have shown the cost of generation at Rs.2.67 per Kwh in the first year as against Rs.2.77 of GRIDCO's present rate. Therefore, from the point of cost, there is justification for grant of consent for the captive power plant.

6. M/s. GRIDCO has brought out an important aspect in their counter showing injection of surplus power from the captive plant to the tune of 300 MU annually by the applicant. GRIDCO has also indicated that in their earlier correspondence, the applicant had intimated to GRIDCO that surplus power sale to GRIDCO would be minimal and INDAL would require backup power in case of plant outage. We considered this aspect carefully and share our perception with the representatives of M/s. GRIDCO that the consent for setting up of a captive power plant does not vest M/s. INDAL with any right for sale of power to GRIDCO or to any other person. The applicant must ensure that capacity of the installation of the captive power plant should not have any additional power available for sale as it is likely to create imbalance in the present surplus power scenario in the State. Considering the standard sizes of generating units, we hold that applicant shall restrict the generation to its own requirement and avoid generation for sale purposes. Regarding their requirement of backup power supply for the captive power plant outage, the commercial terms can be worked out with GRIDCO to mutual satisfaction. We understand that technical safeguards like reverse power relay and directional over current relay set to a preset value can be used for preventing large injection of surplus power into the Grid. Details can be worked out to mutual satisfaction between the applicant and the GRIDCO.

7. M/s. GRIDCO in their counter have also stated that they have no objection for permitting this 77 MW CPP of M/s INDAL provided:

(a) Synchronisation with Grid will be permitted provided the technical parameters of the power plant of M/s INDAL permits such parallel operation. GRIDCO will not be held responsible for any damage, loss in the power plant for any reason, whatsoever during the course of such parallel operation. Power plant shall comply with the Grid code/operating Procedures and instructions of all Statutory / Regulatory authorities as applicable to operation of Plant connected with the State/regional Grid.

(b) M/s. GRIDCO do not guarantee purchase of power from INDAL and they should ensure that there is no unwanted injection into the Grid. If GRIDCO is in need of power, injection of power into the GRID by INDAL could be considered at the appropriate time as per policy in force at that time for purchase of power from such Captive Power Plant.

(c) M/s. GRIDCO will not pay for any surplus power supplied to GRIDCO unless it is contracted for.

(d) M/s. INDAL has to abide by the policies and guidelines framed by GRIDCO from time to time regarding installation, and operation of Captive Power Plants in the State.

8. We hold that the above conditions laid down by GRIDCO are reasonable and we note that the representative of M/s INDAL present during the hearing, agreed to comply with the above conditions.

9. Subject to above said directions and observations, the Commission has no objection to grant consent to the petitioner for setting up a CPP consisting of 77 MW. But before the final consent is granted in writing, we order that the case is referred to CEA for consultation in accordance with provisions of sub-section (2-A) of Section 44 of the Electricity (Supply) Act, 1948.

10. Pronounced this day the 6th June, 1997 in the open Court. Copy to be given to the petitioner, to M/s. Grid Corporation of Orissa Limited and to the Government of Orissa, Deptt. of Energy.

-Sd/
(D.K. ROY)
(MEMBER)

-Sd/
(A.R. MOHANTY)
(MEMBER)

 ORISSA ELECTRICITY REGULATORY COMMISSION
ORISSA, BHUBANESWAR

20.05.97 M/s. Indian Aluminium Company Limited (INDAL), the applicant is represented by Sri B.K. Patinaik, General Manager (Co-ordination) and Sri G. Samantaray, Co-ordination Executive. M/s. GRIDCO, the affected party represented by Sri N.G. Nath, S.E. (PP-I) and Sri D.K. Satapathy, Manager (PP-I). Heard the representatives of M/s. INDAL and M/s. GRIDCO.

During hearing M/s. GRIDCO submitted that (a) there will be increase in fault level due to addition of CPP and needs augmentation of the Gridco system. The cost of augmentation, if requires out of system study need to be met by the applicant, (b) the existing grid sub-station of the Gridco is compact and may not be able to accommodate further augmentation of the switchgears and this may necessiate revised site selection, (c) the applicant should undertake to comply with the conditions of Grid Code to be made by Gridco in the operational process of CPP and meet the cost of augmentation.

Ordered that M/s. INDAL will make necessary reconciliation with Gridco in the matter of system study, site selection and compliance with the conditions of Grid Code in the matter of operational procedure of CPP. M/s INDAL shall ensure capacity of the captive plant matching with their load requirement so that at no time there should be excess for sale to GRIDCO or any other party.

The application of M/s. INDAL shall be referred to CEA for their views.

(A. R. MOHANTY)
MEMBER

(D. K. ROY)
MEMBER

Order No.002 dated 6th June, 1997

06.06.97 The applicant is absent. M/s. GRIDCO, the opposite party is represented by Sri N. G. Nath, S. E. (PP-I). Orders delivered in separate sheets.Copies of the order be given to the applicant, M/s. GRIDCO and Govt.of Orissa, Deptt. of Energy.

(A. R. MOHANTY)
MEMBER

(D. K. ROY)
MEMBER

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