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Home News Power Sector News Extra surcharge on open access consumers: State regulators could follow uniform formula

Extra surcharge on open access consumers: State regulators could follow uniform formula

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Open accessThe power ministry has proposed that all state electricity regulators could follow a uniform formula to compute the extra surcharge on open access consumers. It has also suggested differential cross-subsidy surcharge for peak, normal and off-peak hours based on the time-of-day tariffs. This, the ministry said, would address the issue of uneven scheduling by open access consumers during the day. These proposals are part of a discussion paper on “open access” floated by the ministry. The paper is based on the findings of a committee set up by the Central Electricity Authority, which has identified major issues preventing the smooth execution of open access. As open access electricity consumers frequently revise their power procurement schedule on the basis of their daily load requirement, discoms are compelled to deviate from their energy drawl schedule, incurring heavy penalties. The ministry has proposed that customers should schedule power for at least 24 hours whenever they seek open access.

Sometimes open access consumers decide to keep discoms as back-up power sources. Standby charges for maintaining arrangements for open access consumers should reflect the actual fixed cost and variable cost liability by discoms for providing these support services, the paper proposes. Electricity Act, 2003 said surcharge and cross subsidies would have to be progressively reduced to encourage buyers (with more than 1 MW consumption) to purchase power from the electricity market instead of the discoms through open access.

NITI Aayog, in its ‘three year action agenda’ for FY18-FY20, noted that heavy consumers find it non-viable to buy cheaper electricity from spot markets through open access as state regulators levy substantial cross subsidy charges on such transactions. State regulators levy substantial cross subsidy charges, ranging between Rs 1 and Rs 2.5/unit, which makes it tough for heavy consumers to buy electricity from spot markets through open access. The all India average tariff for high-tension industrial connections charged by discoms is more than Rs 7/unit. This is higher than several countries with per-capita GDPs comparable to India, and even more than some nations with higher income levels. On the contrary, the average market clearing price of power at the Indian Electricity Exchange was Rs 2.49/unit in July. The last date for submitting comments on the paper is September 8.


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