General
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Private power generator Tata Power
reported a 10 per cent jump in Profit After
Tax (PAT) for the quarter ended June 2020 at Rs
268 crore on the back of lower financing cost. The company also
announced three wholly-owned subsidiaries will be merged with the
parent firm.
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In the same quarter last financial year,
the company had reported a PAT of Rs 243
crore. Consolidated revenue during the June 2020 quarter stood at Rs 6,671 crore as compared to Rs
7,567 crore in the corresponding period last financial year.
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"Three wholly-owned subsidiaries
i.e. Coastal Gujarat Power Ltd (CGPL), Tata Power Solar Systems (TPSSL)
and Af-Taab Investment Company (Af-Taab) are proposed to be merged with Tata Power
(parent company) for greater synergies in financing, compliance and
oversight," the company said in a statement.
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It added that the merger is part of a
strategic initiative to simplify the group holding structure and a
broader plan to set the company for future growth through fiscal
consolidation and strengthening of balance sheet.
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"The merger aims to achieve the
long-term objectives by facilitating efficient use of cash and making
available corporate support to the businesses of the said wholly owned
subsidiaries as needed," the company said.
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During the June quarter, Tata Power
won new renewable energy bids totaling 220 Megawatt and reported sale
of ships completed at $212.76 million. Its solar Engineering,
Procurement and Construction (EPC) order book stands at Rs 8,700 crore.
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The quarter also saw Tata Power
taking over the management of CESU, Odisha for distribution of electricity
in five circles - Bhubaneshwar, Cuttack, Puri, Paradeep and Dhenekal in the state.
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The company had recently announced
expansion plans for its network of smart Electric Vehicle charging
points from the current 170 to over 700 by end of this financial year,
under the brand name EZ Charge.
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It has also signed an
pact with MG Motors India to deploy 50 Kilowatt DC Superfast chargers
at select MG dealership locations and offer end-to-end EV charging
solutions to dealerships across India.
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The Central government disagrees with
a recent proposal by Uttar Pradesh to conduct unique online auctions
among power plants under which the state seeks rebates in power bills
from private producers to disburse payments faster.
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“The Union power ministry is clear
that nobody can alter contracts like this,” a government official said
adding that the ministry will soon communicate its stance to Uttar
Pradesh.
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Uttar Pradesh additional chief
secretary Arvind Kumar recently wrote to
Union Power Minister R K Singh and Union Power Secretary Sanjiv Sahai seeking the
Centre’s support for the proposed e-auctions. The move, being the first
time ever by any state asking power plants to bid to get payments for
power supplied, took the power industry by surprise as well.
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The payments are being done through
loans being provided by Power Finance Corp and REC Ltd under the
Centre's Rs 90,000 crore liquidity infusion
package under Atma Nirbhar
scheme. Under the scheme, the payments to power generators are made
directly by PFC and REC but state distribution utilities guide the
financial institutions.
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A senior official in the Uttar
Pradesh government said the move was being taken keeping in the cash
crunch position of the state's distribution companies. However, the
power industry said the proposed bidding by Uttar Pradesh amounts to
arm twisting and hurts investment sentiments in the state.
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"Uttar Pradesh is in the process
of developing an online and transparent bidding process claiming to
give upto 75% of private plant's dues in the
first tranche of the loan depending on the rate of the rebate they
offer. Those plants that will not offer rebates will get paid in the
second tranche of disbursement by PFC and REC," an official said
on condition of anonymity.
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Uttar Pradesh has been sanctioned a
loan of Rs 20,940 crore under the liquidity
scheme, half of which will be disbursed now and half in the second trache when the state fulfills agreed conditions.
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The Union power ministry had last
month issued a direction to PFC and REC asking them to disburse the
sanctioned amount under a liquidity infusion package in a proportionate
manner among state-run and private thermal and renewable plants.
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Meanwhile, the Centre is working to
extend the liquidity package to cover dues for the months of April, May
and June 2020.
Regulations
support Adani
Transmission's EBITDA, collection delays: Fitch
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The operating profit of AdTransmission Ltd's
(ATL's) electricity transmission and distribution business is largely
immune to lower volume caused by coronavirus pandemic as it benefits
from a favourable regulatory framework, Fitch
Ratings said on Wednesday.
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However, the group faces
cash-collection delays from both state-owned power-distribution
utilities and retail customers in Mumbai due to logistical challenges
in collections, lower demand and payment concessions amid the pandemic.
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Fitch said ATL's recurring EBITDA of Rs 1,100 crore billion in the first quarter of the
financial year ending March 2021 was supported by availability-based
payments under a favourable regulatory
framework.
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The assets of ATL's distribution
business, housed in Adani Electricity Mumbai Ltd's (AEML) obligor group, are based on a
cost-plus tariff framework while its transmission projects are either
governed under the return-based framework or were awarded through
tariff-based competitive bidding.
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"Revenue under both frameworks
is based on system availability and is not exposed to volume risk. ATL
maintained availability of its transmission assets and distribution
business above regulatory benchmarks in Q1 FY21," said Fitch.
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The company did not face major
operating issues during India's pandemic-related lockdown as the
government classified electricity supply as an essential service.
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However, ATL faces cash-collection
delays, as most of its customers are state-owned power-distribution
utilities whose operational and financial profiles have weakened from
the pandemic-related drop in electricity demand and payment concessions
to end customers.
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ATL group's cash collection
deteriorated to 60 to 65 per cent in Q1 FY21. However, Fitch said any
delay in recovering accrued revenue will be recouped with interest
costs in line with slated regulations.
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The company says that economic
activity and electricity demand have picked up in Mumbai since the
relaxation of the lockdown in late June with collections at the AEML
obligor group and the rest of ATL group improving to 99 and 80 per cent
respectively in July.
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"Nevertheless, we believe ATL
has ready access to working capital facilities, owing to its regulated
contracted asset base, should counterparty payments be delayed and that
regulatory penalties will cover interest costs on working
capital," said Fitch.
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The day the Supreme Court asked north
Indian states to spell out steps taken to stop stubble burning,
National Green Tribunal(NGT) disposed of an
application filed by retired deputy chief engineer, Punjab State Power
Corporation Limited (PSPCL). The petitioner sought directions to the
Punjab government to convert one of the units of Guru Nanak Dev thermal
plant from coal fired to paddy straw fired to decrease pollution.
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The NGT bench comprising chairperson
Justice Adarsh Kumar Goel,
judicial member Justice S P Wangdi and expert
member Nagin Nanda, in its brief order on
Tuesday, wrote that the Punjab government may take action in accordance
with the law and if the power plant is to be converted from coal fired
to paddy straw fired, all norms laid down should be complied with.
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With this, the state government is
free to dismantle the power plant. Tenders for dismantling of the plant
are to be opened on August 20. Land of the plant has already been
transferred to Punjab Urban Planning and Development Authority (PUDA).
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Darshan Singh had
filed an application in the NGT on December 16, 2019 saying that PSPCL
had prepared a project report for converting one unit of the thermal
plant into paddy straw fired. If the proposal is accepted, he said,
pollution caused by burning of paddy straw will be reduced.
Preparation
for privatisation:
Chandigarh compiling list of power department assets
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An asset count is on in the Union
Territory's power department before the unbundling and privatisation.
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A senior UT official said the
administration will hand over a list of electricity towers, offices,
and equipment etc. to the Union government's consultant. The
Centre-appointed and state-run Power Finance Corporation (PFC) had
appointed multinational company Deloitte as consultant recently.
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In May, Union finance minister Nirmala Sitharaman had
announced to privatise the electricity
distribution companies of the UTs.
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The powermen's
union had opposed the move but the UT administration had promised to
protect the workers' jobs and service benefits, besides giving them
better or similar employment terms. It had also ruled out retrenchment
and transfers. It had a series of meetings with the employee unions to
understand their concerns.
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Last year, the UT's special secretary
of engineering wrote to the superintending engineer (SE) about the
decision to appoint a consultant for turning the electricity wing of
the UT engineering department into a business corporate and start the
process of appointing a consultant through competitive bidding.
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Joint Electricity Regulatory
Commission (JERC) had earlier directed the UT administration to
restructure and reform the power department because it is mandatory
under the Electricity Act of 2003. In a 2018 public hearing, the commission
had pulled up the department for a delay in enforcing the law's corporatisation mandate.
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As Chandigarh doesn't produce its own
electricity, the state transmission utility will be responsible for
smooth transmission. The state load dispatch centre
will be the apex body for integrating the power system operation. It
will also be responsible for optimum scheduling and dispatch of
electricity, maintaining accounts of the volume of power transmitted,
and controlling the intra-state transmission system.
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Chandigarh's electricity department
serves 2.47-lakh consumers of nine categories. Almost 87 per cent of
the consumers, 2.14 lakh in number, are in the domestic class. The
remaining 23 per cent belong to other categories such as commercial,
small power, medium supply, large supply, bulk supply, public lighting,
agriculture power, and temporary supply.
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Amid a series of protests by
opposition parties against the Goa Electricity Department over inflated
power bills, Chief Minister Pramod Sawant on Tuesday announced a rebate of Rs 18.3 crore for all consumers.
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"The government has decided to
give a total rebate of Rs 18.3 crore to
electricity consumers. 50 per cent of fixed charges are waived for
April and May for all low tension domestic, commercial and other
categories.
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"For high tension consumers, the
difference of the billed maximum demand charges and actual recorded
maximum demand charges for April and May 2020 are waived. The rebate
will be adjusted in future bills," Sawant
said.
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Over the last two months, the
Electricity Department has been flooded with complaints from consumers
alleging inflated bills.
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The Congress, the Aam
Aadmi Party and Goa Forward have staged
protests in the state urging the Goa government to examine the excessive
power billing issue.
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In a major relief for Jindal Steel
& Power (JSPL), the Delhi High Court has directed the Reserve Bank
of India (RBI) to allow the Naveen Jindal promoted firm to remit about
$55 million (around Rs 411 crore) to its
Mauritius-based subsidiary.
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The company is seeking to remit a
total $90 million to its subsidiary Jindal Steel and Power (Mauritius)
to meet its debt obligation, which the company was supposed to pay by
June 30, 2020.
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However, the Court has in its order
said that the relief is conditional and the JSPL will have to furnish
the undertaking from the board of director that if for some reason this
court passes a direction to the company to deposit the remitted amount
of around $90 million, the company will immediately deposit the same
amount in the court.
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Also, the court has directed the company
to give an undertaking that it has unencumbered assets of $100 million
or more and the JSPL will shall not sell, alienate or transfer such
encumber assets till next date of the hearing.
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“I cannot help noticing that the
corporate guarantee and the loans have prima facie been taken with the
prior permission of RBI,” said Justice Jayant
Nath in his order of July 24, which was
recently uploaded on the court website. “It would hardly be appropriate
for the RBI to now let the petitioner go in default and dishonour its corporate guarantee because some
investigation proceedings are pending by law enforcement agencies which
appear to have been pending since 2015.”
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According to JSPL, it had made a
foreign direct investment and had undertaken financial commitment in
its three wholly-owned overseas subsidiaries including Jindal Steel
& Power (Mauritius), Sky High Overseas and Jindal Steel Bolivia
after taking the approvals from the RBI.
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Senior counsel Parag
Tripathi, while appearing for the JSPL argued
that the entire transaction, namely including loans of $279.5 million
dollars and the corporate guarantee of $865 million have been given by
the petitioner after taking due permission from RBI.
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The counsel for the RBI argued that
the permission has been declined on the saying of the Enforcement
Directorate. The central bank also argued that the Delhi High Court
lacks the jurisdiction to hear the case since RBI and also the Foreign
Exchange Department, Central Office, Overseas Investment Division both
are situated in Mumbai.
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The RBI had also argued that the
court needs to implead ED in the case to seek their response.
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However, the court had rejected RBI’s
arguments and observed that the discretion has to be exercised by RBI.
The same cannot be delegated to the Enforcement Directorate.
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“The discretion under clause 9 of the
above-noted Regulations has to be exercised by RBI the respondent based
on cogent facts and materials and not at the mere directions of
Directorate of Enforcement,” said the court in its 15-page order. “It
was for the RBI to exercise its discretion in the facts and
circumstances of the case keeping in view its own permissions given and
subsequent facts and events that may have taken place after the
permission was given.”
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The lawyers for the JSPL had also
argued that, since 2015 there has been no fresh inquiry under FEMA or
PMLA initiated by the law enforcement agencies.
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“The old inquiries which are of
insignificant amounts continue to be languishing. Despite the pendency
of those inquiries, it is pleaded that several permissions have been
given by RBI earlier,” argued the counsel for the Jindal Steel &
Power.
Centre’s
power push in J&K: Keran,
Mundian join national grid 73 years after
Independence
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The people living in Keran and Mundian,
located on the LoC, in Kupawara
district of Jammu & Kashmir are brimming with new energy. Their
evenings are no longer dictated by a few hours of dodgy electricity
supply from diesel generators as the area was linked to the grid on
July 18, 73 years after Independence.
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The lights of Keran
and Mundian today shine as a symbol of the
Centre’s push to improve power infrastructure and supply since J&K
was carved out as a Union Territory a year ago. It is pumping Rs 3,500 crore into upgrading and expanding
transmission and distribution infrastructure. Another financial package
of Rs 4,580 crore is in the works to infuse
liquidity in the utilities.
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According to power ministry data, 33
sub-stations, 745 new distribution terminals have been built under
Central schemes in the year since the UT was created. Besides, 48 km of
feeders were separated, 2,020 km of distribution lines and 356 km of
aerial bunched/underground cables were laid to cut line losses and
improve supply during this period to ensure 24X7 supply.
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But the most interesting makeover
perhaps is the installation of energy-efficient LED street lights under
Street Lighting National Programme, similar
to what is seen elsewhere in the country. Energy Efficiency Services Ltd
under the ministry, has installed some 1.2 lakh LED street lights,
split almost equally between Jammu and Srinagar, under an agreement
with J&K power and urban development departments.
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This single initiative alone has
saved Rs 57 crore in power bills for
municipalities, leaving more funds for health and sanitation. The LED
scheme is also estimated to have resulted in energy saving of 81
million units, avoided peak demand of 13.63 MW and reduced CO2 emission
of 56,345 tonne.
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In June, a new joint regulatory
commission for UTs of Ladakh and J&K has
was set up to ensure fair tariff for consumers. The ministry is
currently examining a roadmap submitted by a committee under Alok
Kumar, principal secretary, UP, for creating an efficient and viable
power sector in the UT.
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Power trading solutions firm PTC
India on Tuesday reported an over 7 per cent rise in consolidated net
profit at Rs 100.06 crore for the June
quarter, helped by reduced expenses. The company's net profit stood at Rs 93.26 crore in the April-June period of 2019, it
said in a BSE filing.
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However, total income fell to Rs 4,641 crore during the quarter, from Rs 5,415 crore in the year-ago period. Total
expenses also reduced to Rs 4,499 crore, as
compared to Rs 5,275 crore earlier.
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In a separate statement, the company's
CMD Deepak Amitabh said, "While the demand for traded electricity
was impacted initially, the gradual restoration of economic activity
has seen a revival of demand to levels comparable to the corresponding
period last year."
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"Positive results of structural
initiatives taken by government of India in the wake of COVID -19 are
now visible, and we remain cautiously optimistic," he added.
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In a bid to promote energy
conservation and efficiency, the state government is planning to set up
Energy Conservation Cells (ECC) in all its departments to promote
efficient use of energy at all levels and achieve energy security along
with economic, environmental and social benefits.
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According to an estimate by Bureau of
Energy Efficiency (BEE) and the Andhra Pradesh State Energy
Conservation Mission (APSECM), 25 per cent of the energy consumption
can be reduced by adopting energy- efficient technologies.
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Chief secretary Nilam
Sawhney has directed all heads of departments
(HoD) and district collectors to create ECCs
in all 87 HoD offices, district level
offices, corporations and various society offices in the state. The ECC
will act as a nodal agency to coordinate with APSECM for effective
implementation of energy conservation and energy efficiency measures in
their respective department and organisation.Although
a decision has been taken to create ECCs, orders are yet to be given by
the government. The officials have to constitute the ECCs in their
respective departments within a month after orders are issued.
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The secretary for energy Srikant Nagulapalli said
in a statement on Tuesday that Andhra Pradesh is keen on bringing in
the latest technologies to enhance energy efficiency in key sectors. It
has been approaching international agencies for their support to bring
innovative global technologies in the area of energy efficiency and
energy conservation.
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“We are seeking technological
development, technology transfer for the enhancement of energy
efficiency in the areas of municipal, agricultural, industrial sector
and other key sectors that will enhance energy security, promote
industrial and economic development apart from environmental benefits,”
he said.
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The Central government disagrees with
a recent proposal by Uttar Pradesh
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