Disallowing power sale through open access to impact industry

The decision of Gujarat and Karnataka to disallow the sale of electricity through open access could negatively impact operations of almost 200 industrial consumers, the CII said.
"With this decision coming into effect, industrial electricity consumers in Gujarat will now buy power from within the state at Rs 6-7 per unit as opposed to the Rs 4-4.5 per unit charged by power exchanges," CII said in a statement.
In Karnataka, the freedom of generators to sell electricity to consumers in other parts of the country has been curbed after the government restricted electricity sales to within the state's boundaries.
These decisions challenge the principles of open access in the Electricity Act, the Confederation of Indian Industry said. Open access allows customers to choose their electricity supplier from competing companies instead of being forced to buy power from their local utility monopoly.

"States need to promote the spirit of competition and choice to customers. Open access is at the centre of the new Electricity Act 2003 and must therefore be supported and pursued by all stakeholders in the electricity business," Anil Sardana, Chairman of the CII National Committee on Power, said in the statement.
The consumer's ability to explore competitive electricity prices, thereby contributing to economic competitiveness of their products and services, is an important aim of the Act, said Sardana, who is also Managing Director of Tata Power.

Currently, over 2,400 industrial and commercial consumers, including those in the steel, aluminium, textile and glass sectors and commercial complexes and malls, buy electricity from power exchanges, leveraging open access.

The act allows large users of power, typically with a connected load of 1 MW and above, to buy electricity from the open market.
It helps large consumers, especially sick textile, cement and steel industrial units, by ensuring regular supply of electricity at competitive rates and boosts the business of power bourses.
The provision is also intended to unshackle the power sector by fostering competition, transparency and efficiency for the good of the consumer and the sector.