Government to split Power Grid, float new PSU

Government to split Power Grid, float new PSU
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First Published: Mon, Feb 12 2007. 12 22 AM IST
Updated: Mon, Feb 12 2007. 12 22 AM IST
New Delhi: The Centre has decided to split the Power Grid Corporation of India Ltd (PGCIL), the largest state-owned power transmission company. It has also cleared the decks to float a subsidiary, in the next one year, to take care of the power management functions of PGCIL.
Three years later, this is to be spun off into an independent public-sector undertaking (PSU) under the purview of the power ministry. The committee of secretaries, a clutch of top bureaucrats heading various ministries, had recommended the move. It will now be moved to the Cabinet for approval.
The move has been initiated in concurrence with the provisions of the Electricity Act, 2003, which seeks to separate commercial interests from load management functions. While the commercial tasks entail setting up transmission projects, the load management functions require PGCIL to match demand and supply of electricity in the country. With the entry of private players in transmission, failure to separate the two functions might lead to a conflict of interests.
“The load dispatch functions should not be with an entity having commercial interests, as is the case with Power Grid,” a Central Electricity Authority official said. R.P. Singh, chairman and managing director of Power Grid, said he was not aware of any such development.
The new PSU will oversee the functions of the five regional load dispatch centres (LDCs) currently run by PGCIL—the Northern region, Eastern region, Northeastern region, Western region and Southern region.
A national LDC, which will eventually be set up under the new subsidiary, is also under implementation. It will serve as the nodal agency for all regional dispatch centres. “The new company will be given PSU status by 2011,” a power ministry official said.
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First Published: Mon, Feb 12 2007. 12 22 AM IST