Gujarat power regulator underlines right to fix rates for all consumers

However, GERC says distribution licensees have no power to determine rate, terms & conditions of supply for any category of consumers

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The Gujarat Electricity Regulatory Commission (GERC) on Tuesday ruled that a state electricity regulatory commission (SERC) has the authority to determine rates for all consumers.

Besides, GERC has said distribution licensees are not free from the universal supply obligation stipulated under Section 43 of the Electricity Act, 2003, in respect of consumers eligible for open access, irrespective of whether the latter avail of open access or not. The consumers who avail of open access have the right to obtain standby supply from the area licensee.

Further, GERC has said distribution licensees have no power to determine the rate and terms of supply for any category of consumers.

GERC’s order conflicts with the Union power ministry’s directive of November 30, 2011, that all 1 Mw and above consumers are deemed to be open access ones and no regulator has jurisdiction over fixing  energy charges for these. The ministry had suggested that necessary steps for immediately implementing the provisions relating to open access in the Electricity Act, 2003, be taken.

However, GERC ruled that this interpretation of the provisions of open access was not consistent with the relevant legal provisions and also agreements between distribution licensees and consumers. GERC said the consumers who actually avail of open access are liable to pay the cross-subsidy surcharge and additional charge, if any.

Pramod Deo, former chairman, Central Electricity Regulatory Commission, told Business Standard: “The issue was discussed in the Forum of Regulators and is reflected now in GERC’s order. However, each SERC will have to take its own decision and decide whether or not to amend the open access regulations.”

On the other hand, Jayant Deo, former member of the Maharashtra Electricity Regulatory Commission told Business Standard: “GERC has imposed an additional burden on retail consumers by not following the Union power ministry’s directives of November 30, 2011, and subsequently of April 2012. This order will not pave way for competition in the power sector, as consumers will be denied competitively priced power.”

GERC says a consumer may choose to take supply from the distribution licensee. The latter, by section 43 of the Act, is under an obligation to supply electricity on receiving a request from the consumer in the area of supply.

The price at which electricity has to be supplied will be determined by the SERC.  “The consumers who avail of or are eligible for open access have a right to obtain supply of electricity from the area licensee if they choose,” GERC noted.