Bhubaneswar: Even as the US based Enron Corporation is contemplating pulling the plug on a controversial power project in Maharashtra, another US energy major – AES Corporation, has decided to close down one of its two power generating units in Orissa due to non-payment of electricity dues.

An official source on Monday said the company had announced the closure of a unit of the Orissa Power Generation Corporation (OPGC) at Banharpali in the state's western Jharsuguda district, about 395 kms from state capital Bhubaneswar as the government has failed to clear an outstanding bill of Rs 14 billion.

"We are not going to resume normal operation of the second unit due to non-payment of electricity dues as required under the power purchase agreement," Managing Director of OPGC Grayson Harvell, said in a letter to B K Mohanty, commercial director of the government-run Grid Corporation of Orissa Ltd (Gridco).

AES Corporation picked up 49 per cent stake in OPGC in 1996 after the government decided to divest its stake in favour of a private power company. The state government continues to hold majority 51 per cent stake in OPGC.

Mohanty described the AES move as illegal as it had been announced without consulting the state government. "We are going to take legal action against the company. We are losing Rs 8 million everyday due to the closure of the second unit."

The two units at thermal power station have an installed capacity of 210-mega watt each.

Gridco Managing Director Priyabrata Patnaik has reportedly requested the state government to arrest Harvell under the Essential Services Maintenance Act (ESMA), a top Gridco official said on condition of anonymity.

Gridco holds a 49 per cent in each company and is also the sole transmission entity. It purchases power from OPGC and OHPC and sells it to the distribution companies through bulk supply agreements.

India Abroad News Service