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Home News Power Sector News Karnataka Open access dispute - Centre and CERC to approach supreme court

Karnataka Open access dispute - Centre and CERC to approach supreme court

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Supreme CourtThe power ministry and the Central Electricity Regulatory Commission (CERC) would soon approach the Supreme Court against a Karnataka High Court order that has upheld the state’s powers to prohibit generators from selling outside the state under Section 11 of the Electricity Act, 2003. Dismissing a petition filed by GMR Energies Private Limited and others, the high court said the intention of Section 11 was to direct generators to supply power to meet public demand and not make commercial use. “It has to be read in a balanced way to meet public demand and interest,” it observed.

The high court further ruled: “Open access does not mean unbridled rights or absolute right to supply electricity by generating of their choice. It is done to promote competition among generating companies to ensure cheaper power supply to consumers. Such liberalisation has ensured sea of changes in telecom and aviation. Though the objectivity to avail electricity looks attractive, on a close scrutiny we find there is no substance.”

Citing the open access regime, which enables generators to sell power to any consumer, the petitioners had argued that they were being paid Rs 8.85 per unit and the state’s order to sell power at a lesser cost was not justified.

Power ministry official told Business Standard, “The high court order will hamper open access in transmission for enabling consumers to get power from any source of their choice. Various states, including Tamil Nadu, Orissa and Rajasthan had invoked powers under Section 11 in the past. However, states during a meeting with the power ministry on November 15 last year agreed to withdraw these directions and not invoke their powers in future. The ministry after a detailed study of the Karnataka High Court order has decided to move the apex court against it.”

The official reiterated that open access in transmission was expected to facilitate desired market signal for investment and improvement in services from the existing utilities.

He added that CERC had already issued detailed regulations for open access and 23 state electricity regulatory commissions (SERCs) had released their relevant regulations. “Most have notified charges relevant to open access,” he said.

CERC sources said it had notified the regulations on “Grant of Connectivity, Long Term Access and Medium-Term Open Access in Interstate Transmission”. The objectives in finalising the regulations had been to provide transmission products of different varieties, standardise procedures, define timelines and ensure level-playing field among different categories of market players.

According to the ministry data, as on July 31, 2009, 237 applications were received in 16 states requesting open access for a capacity of 23,015.85 MW. Of this, 147 cases related to captive power plants. Although 168 cases comprising 19,972.37 MW had been approved, only 112 open access cases were implemented. Currently, out of the total capacity applied for, a little under 28 per cent (6,382.73 MW) were implemented, of which 86.5 per cent by Gujarat alone.

D Radhakrishna, power analyst, said: “The high court order will have a detrimental effect in electricity business and power by choice will be a distant dream. There are already 45 electricity traders and two exchanges who have harnessed around 5 per cent of the total demand through their channels. Already seven years have passed, not a single consumer has opted for open access in the country under Section 42.

Source- Business Standard

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