CERC Allows Powergrid To Venture Into Telecom Biz But With Conditions  

In its latest judgment, the Central Electricity Regulatory Commission (CERC) has allowed power transmission company– Powergrid to venture into the telecom business. However, it has imposed some conditions too. 

As per the CERC (Sharing of Revenue Derived from other businesses) Regulations, 2020, power transmission companies must inform the Commission and seek its approval if they want to venture into businesses other than the power sector. 

Powergrid now plans to try its hand in telecom and digital technology. Photo by-Troy Squillaci/Pexels

Powergrid earlier had moved a petition before the CERC seeking permission to undertake telecommunications and digital technology business for works related to telecom services, products, infrastructure, system integration, consulting and others. It also floated a wholly-owned subsidiary (WOS) company-Powertel to undertake the telecom business. 

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In the petition, Powergrid sought permission to venture into the business and also informed the Commission that it could use some of its owned power transmission infrastructure without interfering with its transmission business operations. 

The CERC, while approving the move, also put some conditions, which asked Powergrid not to compromise the commercial interest of the long-term transmission customers by venturing into the new business through its WOS. 

It also said that the transmission systems’ ownership, control, and management would lie with Powergrid. The onus would be on the company to ensure no obstruction is caused to the transmission services due to the additional business due to sharing shared resources. 

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“We observe that the existing telecom business is being transferred to the WOS. Hence apart from ownership, other parameters can be considered constant. Considering the calculations already made for the transmission licensee, we direct that the 10% of the gross revenue earned in a given financial year by the petitioner’s WOS company from the Telecommunication business, for which spare or idle fiber cores of Optical Fiber Ground Wire (OPGW) laid or to be laid on Petitioner’s ISTS lines or space in the substation are utilized, shall be utilized towards reduction of monthly transmission charges payable by the Long Term Transmission Customers (LTTCs),” the order said. 

The CERC also has ordered a review of the situation after four years. “Under Regulation 5(1)(b) of the 2020 Sharing of Revenue Regulations, sharing of revenue shall be reviewed after four years from the date of transfer of the existing business to its WOS. Accordingly, the petitioner is directed to file a petition and submit detailed audited accounts for its WOS after four years of transfer of the existing business to its WOS along with details of revenues and expenses for the telecom business as well as utilization of fibres of OPGW,” the order said.