Global Energy seeks intra-state trading licence

Chennai: Global Energy Ltd, a New Delhi-based power trading company, has sought permission from the Tamil Nadu Electricity Regulatory Commission for intrastate power trading in the State.

The commission sought a detailed presentation from the company, including its experiences in the business in Uttar Pradesh and the value it has added to the power situation.

Outlining the company's business model to the commission here at the Tenth State Advisory Committee, Mr Unni Viswanathan, Vice President-Operations, Global Energy Ltd, said that the company would be able to source cheap power from outside the State, and aggregate small surpluses available with the captive units within the State to sell to the Tamil Nadu Electricity Board.

Arunachal Pradesh supplies cheap power to Global Energy in Uttar Pradesh, which the company then sells to the UP State utility, Mr Vishwanathan said.

A similar arrangement could be arrived at in Tamil Nadu. Global Energy, which does not have a licence for interstate trading, would source cheap power from those State utilities that would be willing to supply power within the State border. The company would then sell the power at competitive rates to TNEB, he said.

The scope of the business would be small, initially because of the monolithic structure of TNEB. But the company sees it as an emerging business with the power sector reforms. The company would probably be able to supply about 25-50 MW, he said.

The proposal met with mixed reactions, with some of the members willing to explore the possibilities. Power trading was inevitable, the Electricity Act 2003 provides for it in the days of power sector reforms, they said.

TNEB and the Central Organisation of Tamil Nadu Electricity Employees (COTEE) strongly opposed the move. TNEB's Chairman, Mr Hans Raj Verma, said that the move is a 'back door' entry to getting a distribution licence within the State. The time was not conducive for intrastate power trading, he said.

Mr S. Pancharatnam, COTEE, said that power trading would lead to speculation in the long run.