CASE NO. 22 of 1997

ORDER No.002 DATED 4th NOVEMBER, 1997

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

In the matter of application of M/s Ispat Alloys Limited, Balgopalpur, District: Balasore for continuous and parallel operation of their Captive Power Plant with the Gridco system.

M/s Ispat Alloys Limited - Petitioner

For the Petitioner:
Shri B. Kanungo, Resident Representative.
Shri G. Purushottam, Dy. General Manager (Engg.).
Shri R.K. Jena, Manager (CPP).

For the affected party:
Shri B.M.M. Rao, Chief Engineer (Com.), GRIDCO.
Shri B.P. Rekhani, General Manager (RAU), GRIDCO.

1. A petition was filed by M/s. Ispat Alloys Limited (IAL) 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 continuous and parallel operation of their Captive Power Plant with the Gridco system.

2. At present, M/s. IAL is engaged in production of Ferro Alloys through continuous process in their furnaces. They have entered into an agreement for power supply for a contract demand of 28 MVA on 19.02.85 with GRIDCO (the then 'OSEB) and power supply was availed on 26.09.86 at 132 KV voltage level as power intensive industry. During the period of their operation, they have obtained permission at different stages from OSEB for installation of Diesel Generator set for operation in stand-by mode as indicated below:

1988 --- 2 nos. D.G. Set each capacity 4.33 MW/5.41 MVA

1993 --- 12 nos. D.G. Set each capacity 5.40 MW/5.95 MVA

1996 --- 2 nos. D.G. Set each capacity 10.5 MW/13.13 MVA

Thus, the total cumulative capacity of their D.G. set used as Captive Power Plant (CPP) running in stand-by mode comes to 39 6 MW. The reason for such installation of CPP as indicated in the petition is that Gridco could not provide additional power in time and cost of their own generation works out more cheaper compared to Gridco's tariff rate applicable to Power Intensive Industry. They have now proposed to run their existing D.G. set continuously in parallel with the Gridco system at 132 KV level, even though their generation voltage is at 11 KV. In the petition, the applicant has enclosed the report on interruption/ restriction of power supply justifying the installation of such D.G. set in the course of their operation of their plant over a period from 1988 to 1996. It is seen from such interruption/ restriction report that the power supply position has considerably improved notwithstanding the statutory supply restriction prevailing in the State upto the year 1994. Gridco in the meanwhile, has upgraded the grid sub-station at Balasore from where the petitioner is availing the power supply at 132 KV with installation of 2 nos. 100.MVA 220/132 KV auto-transformer and commissioning a single circuit 220 KV line from Duburi to Balasore hitherto served with 132 KV single circuit line from Jajpur Road Via Bhadrak grid sub-station.

3. The above application was decided to be disposed of through a proceeding and a Case No. 22 of 1997 was assigned for the purpose. Notice was served on M/s. IAL, the applicant and on M/s. GRIDCO, the affected party, for hearing on 04.10.97. Counter was filed by GRIDCO on 27.09.97. In response to the notice, both the petitioner and GRIDCO appeared on 4th October, 1997 through their representatives as indicated earlier.

4. M/s. IAL in their subsequent clarification has submitted the audited report for the fixed cost and variable cost for the year ending 31.03.1997 of their D.G. set operation for examining the cost of generation per unit while considering the permission for continuous and parallel operation of their D.G. sets. The average cost of generation of their total Captive Power Plant comes to Rs.2.304 paise/unit in their Audited Statement which is less than the prevailing Gridco tariff rate of Rs.2.90p/ unit applicable for Power Intensive Industry. Representative of M/s. IAL indicated during the hearing that with the trend in rise of tariff of Gridco, it will be better to operate the CPP continuously. The representatives of the applicant also confirmed during the hearing that the present condition of power supply is much better than earlier years of their operation. They also confirmed that they would continue to keep their existing contract demand of 28 MVA in tact with Gridco notwithstanding the continuous operation of their CPP.

5. M/s. Gridco in their counter dated 27th September, 1997 have showed No Objection for running the D.G. set on continuous basis in parallel with the Gridco system as proposed by the applicant. In their counter, they have set out the following conditions:

1. One 132 KV breaker, a set of lightning arrester, a set of CTs with suitable provision for protection against reverse power flow will be installed on the consumers side of the 132 KV feeder giving power supply to the petitioner.

2. The petitioner will abide by the instructions of the Grid Operation Organisation regarding operation of the generating sets.

3. The petitioner will observe the Grid code.

4. Power flow should not take place from the system of M/s. Ispat Alloys Ltd. into the system of Gridco.

5. Gridco will not pay for any inadvertent flow from Ispat Alloys Ltd. to Gridco.

6. The petitioner will furnish the scheme of inter-connection with Gridco's system giving details of protection, safety arrangement and measures to prevent flow of surplus power to the Gridco's system for approval of Gridco and carry out works as per the approved scheme.

7. Gridco will not be liable for any kind of loss whatsoever caused directly or indirectly due to parallel operation of the CPP with the system of Gridco. The petitioner may be directed to furnish an undertaking to this effect.

8. Gridco may be allowed the right to inspect the inter-connection system and the CPP at any reasonable time after intimating the petitioner.

6. The present arrangement of power supply to the applicant does not involve a circuit breaker at the receiving end as is evident from the schematic layout furnished with the petition. Instead of such circuit breaker, the petitioner has provided 3 nos. circuit breakers independently controlling their 3 nos. 132/11 KV power transformers. In view of their present proposal to run continuously in parallel with Gridco system, we hold that one number 132 KV circuit breaker with other associated equipments should be installed at the Ispat Alloys Ltd. plant site for parallel operation of the CPP with the Gridco system. The existing metering arrangement at Balasore Grid sub-station shall continue as has already been in operation with the present power supply agreement. We, therefore, hold that the condition at (i) indicated by Gridco is valid and just.

7. The petitioner has confirmed that they would continue to draw power from Gridco even after continuous operation of their Captive Power Plant. The condition proposed by the Gridco to prevent power flow to the Gridco system is just and reasonable. The applicant should ensure prevention of power flow into Gridco system by installing reverse power relay or directional over current delay with preset value for tripping in the event of power spillage into Gridco system. Since, the applicant will be operating in parallel with Gridco system, they have to comply with the Grid Code and instructions of State Load Despatch Centre as they will be connected as an operator with a total inter-connected Grid. In case any inadvertent flow is made from the M/s. IAL to Gridco notwithstanding the preventive protection provided for, Gridco should- not be made to pay for such inadvertent flow as it is considered to be a part of the operational lapse arising out of parallel operation of the Captive Power Plant. The alteration or modification or upgradation of installed equipments required for parallel operation should be vetted by Gridco in the interest of the stability of the inter-connected Grid. We stipulate that Gridco shall not be liable to compensate for any loss whatsoever directly or indirectly to the generating units of the CPP during parallel operation of the CPP due to grid disturbances as such risks are to be borne by the constituent itself operating with the inter-connected grid. The condition indicated by M/s. GRIDCO forthe right to inspect the inter-connection system in the CPP at any reasonable time is already provided in Section 20 of the Electricity Act, 1910 and this need not be reiterated in the order.

8. In consideration of above, permission is hereby granted to the petitioner under sub-section (2) of Section 44 of the Indian Electricity (Supply) Act, 1948 read with sub-section (3) of Section 21 of the Act for continuous and parallel operation of their Captive Power Plant consisting of 6 nos. Disel Generator units of total capacity 39.6MW/48.16 MVA.

9. Copy to be given to the petitioner and M/s. Grid Corporation of Orissa Limited.

Sd
(D.K. ROY)
MEMBER

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