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Home News Power Sector News Power ministry, Plan panel differ over open access

Power ministry, Plan panel differ over open access

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Open accessConsumers of power with demand for 1 mw and above would soon have to choose their suppliers, a move that would infuse the  'competition' in the transmission and distribution segments, if the Planning Commission has its way. However, the power ministry can't agree. The ministry's understanding is that granting open access is the regulator's call. The Plan panel is pushing for implementing the provision for large consumers on a mandatory basis. Armed with a favourable legal opinion from the Attorney General, the Commission is pitching hard for implementation of open access for large consumers as envisaged in the Electricity Act, 2003.

Planning Commission deputy chairman Montek Singh Ahluwalia used the platform of state energy ministers' conference on 13-07-2011 to reaffirm his department's view on the issue.

Consumers with demand of 1 mw and above are basically commercial and industrial consumers. Price of electricity procured through open access has to be negotiated between consumer and the supplier because regulators do not have the authority to determine tariff in such cases. Commercial and industrial consumers account for over 65% of electricity consumption, according to statistics available with the central electricity regulatory commission.

While giving his opinion recently on a reference made by the Planning Commission, the AG has said under Section 42 (2) of the Electricity Act, 2003, regulators cannot determine the tariff for power consumers with demand of 1 mw and above after January 2009. Going by the AG's interpretation, all consumers with electricity demand of 1 mw and above are open access consumers.

However, the power ministry is not satisfied with the opinion given by the AG on open access and has sought a review. Sources said power secretary P Uma Shankar met AG recently and discussed with him the negative implications of making open access mandatory.

The power secretary has argued that while electricity shortfall continues in the country, making open access mandatory would create a lot of uncertainty in power supply.

Consumers might not be able to tie up the required supply given the prevailing electricity shortfall.. As a result, they might end up paying exorbitant tariffs to local discoms for the supply of power on a standby basis. Discoms are required to provide standby power supply to open access consumers at a negotiated tariff. Regulators are required to determine only wheeling and cross-subsidy surcharge for open access consumers.

Discoms, which buy electricity under long-term contracts, too would face serious problems in procurement of power if the open access is implemented as a mandatory policy. Even if consumers tie up power supply, there is no assurance that they would get uninterrupted power supply. It would not be feasible for them to meet the standby electricity requirement of open access consumers. For example, Maharashtra State Electricity Distribution Company has received over 120 applications for open access from consumers with demand of 1 mw and above. Supplying standby power to these consumers would be quite a challenge for the discom. Further, in case of shortfall, if a discom resorts to loadshedding to its customers, how can it maintain supply to open access consumers drawing power through the same network?

Source- Financial Express

 

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