Tata-Reliance power wrestling shows open access still stuck

The ongoing tussle between Tata Power and Reliance Infrastructure over power-purchase and consumer-shifts in Mumbai has once again brought the issue of open access in transmission to centre stage.

One plea of Tata Power to the High Court here in its petition on the issue is the demand for a state load despatch centre (SLDC) which does not take orders from the state government.

Tata had asked the SLDC to send on 160 Mw of the power it generated to its own new Mumbai consumers, largely taken from R-Infra, and not to the latter any more. The SLDC declined to do so.

Industry sources told Business Standard there were around 40 traders and two power exchanges but they’re confined to sell only to distribution companies, at approved rates. In fact, free open access is allowed in almost no state, despite the 2003 law in this regard. Maharashtra does formally allow it and so doesMadhya Pradesh. “Even a surplus state like Chhattisgarh only partly allows it. Karnataka and Andhra Pradesh initially allowed it, but have now stopped,” said one.

A Union power ministry official said the issue was discussed at length on April 28 at a meeting convened with the states. The minister reiterated that free open access was needed to encourage competition and more choice for consumers.

On the Tata-Reliance dispute, industry sources said when Tata got over 30,000 consumers of Reliance, the transfer was cleared by the state power regulator, it was a clear message that consumers want choice.

Sources at the power ministry and industry agreed that high cross-subsidy charges, accounting processes and power-wheeling charges were major blocks in making open access a reality. “Even though most of the states have allowed consumers with more than 1-Mw consumption for open access, due to very high cost of external power, no buyer has opted out anywhere in the country, except in Punjab . In Maharashtra, cross-subsidy charges are zero but distribution companies have not accorded permission, for fear that they would lose consumers,” sources said.

The other major problem is the authority with the government concerned to invoke reserve powers in the public interest, as in sections 11 or 37 of the Electricity Act, 2003.

The Karnataka government invoked the first section recently to bar generators from selling power outside the state. The Maharashtra government invoked the latter to direct the state load despatch centre not to send on 160 Mw as requested by Tata Power for its distribution company.

Said D Ramakrishnan, power analyst: “Consumers have to pay a tariff which is increased every year by around 20 per cent, without any option to select their own supplier in the wake of lack of availability of open access.”