Sale of power: Sugar companies move HC

Sale of power: Sugar companies move HC

Sale of power: Sugar companies move HC

The sugar companies have moved the High Court challenging the State government’s action of invoking Section 11 of the Electricity Act, mandating private power generators to sell power generated by them only to the state-run energy companies.

Saundatti-based Shivashakti Sugars Limited and others have approached the court seeking to quash the government order dated March 26, 2014, directing private power producers to sell the entire power generated by them to government-run companies at a fixed price of Rs 5.50 per unit.

The petitioners have termed the government order “arbitrary and a case of misconstruing the powers conferred upon it.”

Stating that the government action will discourage the private sugar companies generating power, they have contended that the cost of generating power comes to Rs 6-7 per unit.

Prabhulinga Navadgi, the counsel for the petitioners, submitted that unless the government took stakeholders into confidence, the action of the government would be counterproductive to the growth of energy sector in the State. “Power and water should be considered as essential resource,” he said.

Pointing out that Section 11 could be involved only under “extraordinary” circumstances, the petitioners have pointed out that there had been no capacity addition in the energy sector in Karnataka except the Bellary Thermal Power Station and a few minor power projects.

About 100 cogeneration units produce approximately 600 MW of power in Karnataka.
Justice B S Patil has ordered notice to the State and the Union governments.