After the implementation of the Indian Electricity Act 2003, this is the first case in India where a second licence for power distribution has been given for one urban area.

PVVN had applied for the licence in Greater Noida in April 2008. The power regulator had held a public hearing in Greater Noida on October 1 in which all the stakeholders were invited to put forward their claims and objections. The licence was formally issued to PVVN on Monday.

NPCL received the licence from the UP government on December 15, 1993, during the SP-BSP coalition headed by Mulayam Singh Yadav.

According to the laid down rules, within 64 months of the issue of the licence, NPCL was required to set up a thermal power plant with an installed capacity of 90 MW. The conditions also provided that if NPCL failed, then its licence will be cancelled or the then tariff at which the UP State Electricity Board was selling power to NPCL will be doubled. Interestingly, none of the three happened — neither did the NPCL set up the power plant nor was their licence cancelled or tariff hiked.

In its licence application to the regulator, the PVVN contended that NPCL has not been able to meet the growing power demands in the area. It also argued that the NPCL did not set up its own power plant of 90 MW-capacity as required under the agreement it had signed in 1993. “The government has to step in since the industrial expansion in Greater Noida has been hit badly by the shortage of power,” said an official of the UPPCL. He added: “The NPCL is reluctant to supply power to villages around Greater Noida and is ignoring the protests carried out by locals.”

On the other hand, the NPCL had opposed UPPCL’s move for obtaining the licence. “We are serving over 50,000 consumers including industrial, commercial, domestic and 2,000 rural connections,” said an NPCL official.

On the issue of setting up the 90-MW power plant, the NPCL maintains that while it purchases the said amount of power from UPPCL, it also procures an additional 25 MW from independent sources under the “Open Access Regime”, as provided by the Indian Electricity Act 2003.