In a recent order, Central Electricity Regulatory Commission (CERC) has stated that Power Grid Corporation of India Ltd (PGCIL) will continue to take care of expenses of Central Transmission Utility of India Ltd (CTUIL), which is currently PGCIL’s wholly-owned subsidiary, up to March 31, 2024.
The order notes that PGCIL will continue to take care of CTUIL’s expenses up to March 31, 2024 or till such time that further orders are not issued.
CTUIL was carved out into a separate company on December 28, 2020 by isolating the “Central Transmission Utility (CTU)”-related activities of PGCIL. CTUIL started regular operations on April 1, 2021.
It was then proposed that CTUIL would be eventually made into a separate entity, directly under the Union power ministry, and would thus have a separate revenue stream.
However, as the proposal to make CTUIL has not yet fructified, CERC has proposed that PGCIL would continue to take care of the revenue and finances of CTUIL till the aforementioned date.
Currently, CTUIL has a total manpower strength of 83 that includes 77 executive employees and six non-executive ones. All of these have been taken from PGCIL and deputed to CTUIL. The employees taken from PGCIL were performing the same functions before the segregation of the CTU, and as such the employee expenditure is already been included under O&M expenditure by PGCIL through orders in various tariff petitions.
CERC has therefore ordered that expenses related to such employees, as well as other related expenses of CTUIL, shall be taken care of by PGCIL till March 31, 2024 or till such time that further orders are not issued. For this purpose, PGCIL and CTUIL will maintain separate accounts and always keep them reconciled, CERC has noted.
Incidentally, the functions that CTUIL has envisaged for itself, include:
- Carrying out survey for route of transmission line and location of substation for projects based on TBCB prior to bidding.
- Ministry of Power may award projects of exempted categories on nomination basis to CTUIL, which in turn will assign these projects to PGCIL/other transmission licensee through Concession Agreement.
- Nodal Agency for signing of TSA (transmission service agreement) for projects to be implemented through TBCB route
- Fair valuation of RTM (regulated tariff mechanism) and TBCB assets after validity of transmission license gets over and for carrying out bidding
- Quality monitoring, design checking, testing inspection and project coordination through Independent Engineer for ISTS projects
- To provide Technical Specification (TS) for RTM projects as is being provided for TBCB projects in order to have uniformity for all ISTS projects
Conflict of interest
It can be seen from the above that before the segregation of CTU from PGCIL, there was a clear conflict of interest between the two aspects of PGCIL – that of a developer under the TBCB route, and that of CTU. It was alleged that as PGCIL performed the functions of CTU, it was privy to information regarding projects that were structured under the TBCB route. This could allegedly “help” PGCIL whilst bidding for such projects.
