Power regulator Central Electricity Regulatory Commission (CERC) has approved a proposal of state-run Power Grid Corporation of India Ltd (PGCIL) for incorporation of a wholly-owned subsidiary company to undertake telecommunications and digital technology businesses.
In an order issued on July 10, 2021, power regulator CERC said, “We approve the formation of a wholly-owned subsidiary company by the petitioner (PGCIL)…. to undertake the telecommunications and digital technology business for the works… as prayed in the petition, with the condition that such a wholly-owned subsidiary company by the petitioner licensee shall not be a transmission licensee or a deemed transmission licensee…”.
Besides, PGCIL shall indemnify all the long-term transmission customers for any additional cost or losses or damages caused due to the creation of the subsidiary company; and it shall maintain the accounts of the wholly-owned subsidiary company separately, the CERC stated in its order.
Giving rationale behind incorporating a separate arm, PGCIL had pleaded that it is being proposed to maintain clarity in business operations and transparency in revenue of two businesses and for better control and management of two businesses.
PGCIL is mainly into the power transmission business.
It had submitted that the beneficiaries (discoms) will not be prejudiced in any way by incorporation of a wholly owned subsidiary company as it will continue to share 10 per cent of the gross revenue earned by its subsidiary company with the beneficiaries in accordance with the provisions of the 2020 Sharing of Revenue Regulations.
