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Home KSEB Open access turns out to be a shocker to KSEB Limited

Open access turns out to be a shocker to KSEB Limited

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Open accessThe Kerala State Electricity Board Limited (KSEBL) has said that it suffered a revenue loss of Rs 35.94 crore in 2015-16 on account of having to provide 'open access' to industrial consumers without collecting a surcharge for the same. The beleaguered state government company has now sought permission from the Kerala State Electricity Regulatory Commission to collect cross subsidy surcharge and an additional surcharge from these consumers to make up for the loss.

Open access allows electricity consumers in the state to buy power from suppliers of its choice and use the transmission network of the KSEB to bring it home. However, the commission has not allowed the KSEB to collect surcharge to make up for the financial loss it suffers when its high-end consumers abruptly drop the KSEB to go shopping with private suppliers.

According to the KSEB, the Electricity Act allows it to collect cross subsidy surcharge from such consumers to enable low-cost power supply to economically weaker sections like the domestic category. Open access without cross subsidy leads to massive losses to it, the KSEB said. The power utility generally enters into long-term purchase deals with generating stations outside the state months in advance, anticipating the projected demand. But consumers, generally big industries, opt for open access on a day-ahead basis if prices are lower in the open market. This leaves the KSEB in the lurch as it has to surrender the excess power it has booked. But it still needs to pay a fixed cost to generating stations regardless of whether it buys the power or not.

''During the year 2015-16, 12 embedded consumers of KSEB had drawn power through open access whereas in 2016-17, 14 consumers had availed themselves of this facility. In 2015-16, the total open access drawal was 142 million units (MU) and this year (2016-17) it is 119.45 MU up to July 2016. Correspondingly, the KSEB had to surrender 123.76 MU and 99.81 MU in these years. The unrecovered fixed charge that had to be paid by KSEBL to its suppliers was Rs 16.13 crore and Rs 15.83 crore,'' the KSEB said in its plea to the commission. The total revenue loss stood at Rs 35.94 crore in 2015-16.

Open access and cross subsidy have been a source of bitterness between the KSEB and the regulatory commission. In July, the KSEB denied open access to 15 industries, kicking up a row.

The commission ruled in favour of the industries, but remained silent on the KSEB's demand for cross subsidy. Industrial consumers comprise only 1.24 percent of the KSEB's 1.16 crore consumers, but account for 24 per cent of the KSEB's electricity sales, and therefore, a lion's share of its revenue from tariff. So losing them to private players via open access leaves a big dent in the power utility's income.

Source- Indian Express

 

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