To promote open access and competition in the sector, the power ministry today reiterated it could direct the Central Electricity Regulatory Commission (CERC) and the Forum of Regulators (FoR) to take necessary action, including framing of appropriate regulations, to implement the provisions of open access in the Electricity Act, 2003.
On November 30, 2011, the power ministry, along with the law ministry, had issued a circular, stating consumers with a capacity of 1 Mw or more were considered open access consumers and the regulator had no jurisdiction on fixing energy charges for them.
In the same circular, the ministry had directed all authorities concerned to implement provisions relating to open access in the Electricity Act, 2003. On April 23 this year, the ministry had issued directions under section 107 of the Electricity Act, 2003, to CERC and FoR to frame appropriate regulations, among other steps.
However, on May 1, CERC stated issues pertaining to open access to consumers under section 42 of the Electricity Act, 2003, were under the jurisdiction of the state electricity regulatory commissions (SERCs). It added it had jurisdiction over open access in inter-state transmission and had created the necessary regulatory framework through its regulations on short-term open access and grant of connectivity, long-term open access and medium-term open access in inter-state transmission.
It said it had taken steps to facilitate open access by specifying intra-state transmission charges for state networks, in case these were not fixed by SERCs. Today, the power ministry stated it wasn’t clear whether the CERC secretariat had initiated steps to align the model FoR regulations on intra-state open access with the interpretation of the law ministry. Therefore, it reiterated its direction to CERC.
Jayant Deo, managing director and chief executive, Indian Energy Exchange (IEX) welcomed the fresh directive. “This will help retail consumers and development of power sector in the country. To make it operational, IEX has given a proposal to create a national bulk power market for consumers with a capacity of 1 Mw or above. We understand the power ministry has invited views in this regard….IEX is quite sure the power sector would come out of its present impasse,” he said.
Power analyst D Radhakrishna said a few states such as Maharashtra and Madhya Pradesh had initiated action to operationalise open access. “There has been an overall resistance of embedded distribution companies to allow open access. State distribution companies feel bulk and paying consumers may walk away, which would lead to their financial conditions deteriorating,” he added.