CASE NO. 27 of 1997

Present:
Shri S.C. Mahalik, Chairman
Shri A.R. Mohanty, Member
Shri D.K. Roy, Member

M/s Uniworth Agro Limited, - Petitioner

Vrs.

1. Grid Corporation of Orissa Ltd., Bhubaneswar - Affected Party
2. Deptt. of Energy. Govt. of Orissa. - Affected Party

For the Petitioner:
Mr. B. C. Das and Mr. S. K Nanda

For the affected parties:
1. Mr. N. G. Nath
2. Mr. S. Pradhan and Mr. J. Misra

Date of argument: 07.01.1998

Date of Order: 02.03.1998

ORDER

This is an application under Section 21(3) of the Orissa Electricity Reform Act, 1995 (hereafter for short, Act 1995) read with Section 44 of the Electricity (Supply) Act, 1948 ( for short, the Act, 1948) for grant of consent for installation of 2 nos. of co-generation heat and power plants (CHP), 35 MW each, at Barkote in the Dist. of Deogarh.

2. The relevant facts of the petitioner's case may be traced below :

M/s Uniworth Agro Ltd., Calcutta, a company of the Uniworth Group, has planned to set up an agro - industrial complex at Barkote with an ultimate capacity of 6000 tonnes of cane crushing per day (TCD). In addition to this, at least two downstream process plants, such as, an alcohol and furfural plant, producing 60 Kilo litres per day (Klpd.) and 40 tonnes per day (TPD) respectively are also planned with a view to extracting from the cane all possible values - sugars, chemicals, paper and energy. The agro-industrial complex is ultimately designed to produce sugars and syrup for the domestic and export markets; agro-based chemical from the sugar bagasse; ethanol of potable, pharmaceutical and perfume grades, bio-fertilisers paper from bagasse and bamboo and co-generation electric power from agro-residuals employing the best proven technology. In the first phase, it will produce Raw Sugars, Refined sugars of various grades - including EEC Grade 2 and pharma sugars at an estimated cost of Rs.620 crores. In the second and final phase, the product line will be expanded to include sucrose and inverted syrup, spending Rs.515 crores.

2.1 The planned peak generation of the agro-industrial complex is 2 X 35 MW, even though the peak requirement of the industry is 18.3 MW during crushing season. In order to meet the requirement of electricity and steam for sugar mills and other down-stream processing plants, a cogeneration heat and power plant (CHP) has been envisaged as a part of the industrial complex. The sugar cane bagasse and the agro-mass from the furfural plant would be utilised in the CHP plant to generate electricity.

The petitioner has further prayed that it may also be allowed to sell the surplus power to 3rd party customers within the State of Orissa after meeting its own requirement.

3. Chairman-cum-Managing Director, Gridco, Bhubaneswar, the licensee, is Affected Party No.1 of this case while the Principal Secretary to the State Govt., Energy Department is the Affected Party No.2.

3.1 The Gridco in its counter/reply dt.19.11.97 has not, in fact, raised any objection to the two fold prayer of the petitioner. It, however, raised certain terms and conditions to be taken note of by the Commission while granting permission to set up a 70 MW CHP and for the 3rd party sale of surplus power. The terms and conditions may be summarised below:

    1. The petitioner may be permitted to sell surplus power to 3rd party customers inside the State at the rate charged by the Gridco to that category of consumers

    2. The petitioner shall pay wheeling charges to Gridco at the prevailing Rate

    3. Losses, if any, due to non-settlement of claims with third parties shall be the liability of the petitioner or its failure to sell surplus power leading to disputes with 3rd parties.

    4. Flow of power to Gridco's system from CHP should be prevented in case the power generated is not fully consumed and in case of parallel Operation, the power injected inadvertently and without being sought for will not be paid for by Gridco:

    5. The Gridco should not be saddled with any kind of financial burden or loss which the petitioner may face on account of loss of load or generation because of the system disturbance or abnormal system condition, if the CHP is allowed to operate in parallel with Gridco system.

    6. Separate agreement may be executed between Gridco and the petitioner for sale of back up power. power required during construction of the project and for wheeling of the surplus power utilising the T&D system of the Gridco.

3.2 The Additional Secretary to the State Govt. Energy Department in his communication dt.13.11.97 recommended the case of petitioner including its prayer for sale of surplus power to 3rd party consumers inside the State of Orissa.

4. Mr. B. C. Das and Mr. S. K. Nanda, the authorised representatives of the petitioner appeared on their behalf on the date of hearing of this case i.e. on 07.01.98. Mr. S. Pradhan, Addl. Secretary, Dept., of Public Enterprises-cum-Nodal Officer with Mr. Jayadev Misra, (Advisor Power) represented the Energy Department.

5. Upon consideration of the materials, pleadings of the parties, documents produced (Exa.A-1) and submissions made at the hearing, the Commission has decided to have no objection to grant consent to the petitioner under Section 44 of the Act, 1948 read with Section 21 (3) of the Act, 1948 to set up a co-generation Heat and Power Plant as applied for subject to consultation with the Central Electricity Authority. The Commission further decided that the Commission will have no objection to sale of power to third party provided that for any such agreement with third party the applicant will obtain prior approval of OERC through separate filings.

6. The terms and conditions raised by Gridco mentioned under para 3.1(iv) and (v) are primarily meant to protect itself from incurring any financial liability in the event of flow of power to Gridco's system from the co-generation Heat and Power Plant. Further it has sought to fortify itself from incurring any financial liability against flow of power from the CHP to its grid inadvertently and without being required when both the systems run parallel. Finally, the Gridco has sought to be protected against any future claim of compensation or damage in case the petitioner is put to loss of load or generation or damage of its plant because of system disturbance or abnormal system condition.

    1. Be it stated here that the petitioner has not filed any rejoinder to the counter/reply of the Gridco dt.19.11.97 comprising the above terms and conditions. Further, Gridco in its counter dt.19.l1.97 has not specifically raised any objection for grant of consent as applied for. On the other hand, it has referred to the letter dt.13.11.97 of the Energy Department recommending the case of the petitioner.

    2. In summing up the case of the parties, the following inferences emerge:

    1. There is no objection by the Gridco to the substantive prayers of the petitioner as indicated above.

    2. Nevertheless the Gridco has put forth certain terms and conditions (vide para 3.1(iv) and (v)) for being imposed against the petitioner as conditions precedent to granting of permission to set up a C.H.P. and sale of surplus power to 3rd party consumers.

    3. The petitioner has not raised objections by way of rejoinder against the said terms and condition.

    4. The State Govt. in Energy Department has substantially recommended the case of petitioner. It has also been placed by the representatives of the State Govt. before the Commission that it is the declared policy of the Govt. to encourage agro-based industries by providing various concessional treatment and to the co-generation Captive Plants of such industries.

    5. Adviser (Power) of the State Government, Energy Department, Shri Jayadev Mishra has specially averred on the strength of Govt. of India circular No.1/6/93-CPG dt.05.01.95 of Ministry of Non-Conventional Energy Sources, Power Group, that it is the policy of the Govt. to encourage generating steam at high presure and temperature of atleast 60 kg/cm2 and 450°C respectively, from bagasee so as to optimise the fuel efficiency. He futher contended that in conformity to above guideline the boiler capacity of 140 Tonnes/Hr - has been found as optimal capacity at pressure of 110 Kg/cm2 and temperature of 540 C adopted by the applicant. Matching with this capacity of Boiler (Two Nos.), Two Nos. multi extraction condensing Turbine Generator units of 35 MW capacity each is found reasonable.

7. Thus, regard being had to the facts and circumstances of the case outlined above the Commission orders that after consultation with CEA, permission shall be granted to the applicant for setting up a 2 X 35 MW co-generation Heat and Power Plant at Barkote in the district of Deogarh (Orissa) in terms of the application subject to the following conditions:

    1. the petitioner shall make adequate arrangements to prevent flow oof power to Gridco's system and in case it flows inadvertently, when run in parallel, no charges/fees will be leviable; and

    2. the Gridco shall not incur any financial liability whatsoever due to loss of load or generation or damage to Captive Power Plant due to its system disturbance and system conditions while running in parallel with integrated Gridco system.

    3. Surplus power can be sold to Gridco and/or a third party provided the prior approval is taken from the OERC in separate filings with regard to every party and rate.

Given under the hand and/seal of the Commission, this day, the 2nd March, 1998.

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