The state energy department is still undecided over allowing ‘open access’ in power trading as it has not received the response of Gridco, the state-run bulk power trader and transmitter on the issue. Gridco officials said, they are discussing with other state governments about their stand over this matter and will give their reply soon.
In the first week of July, the state government had asked Gridco to give its view regarding implementation of open access norm in power trading, after a central government directive in April asked all state governments to implement the most-awaited reform in power sector.
Open access norm in a power transmission network enables industrial buyers to procure power from different distribution companies, including private power generators at a negotiated and competitive price.
The provision for open access also states that state power regulatory commissions cannot fix electricity tariff for bulk power consumers according to their own wish. However, they can determine rates for wheeling charges and cross-subsidy for using their grid network.
Gridco officials have always maintained that if industrial consumers opt to buy power from a distribution company other than attached to its network, then they would still have to pay the cross subsidy charges, as they are paying currently.
“We do not have any problem if consumers, with more than 1 Mw consumption (mostly industrial users), buy power from outside market. But we will recommend that they still need to pay the subsidy charges,” the Gridco official said requesting not to be named.
As per cross-subsidy policy, the regulators can charge high tension (HT) and extra high tension (EHT) consumers higher than their actual supply cost, to put lesser tariff burden on low-end consumers such as domestic and small industries.
In 2010-11 and 2011-12, large industrial consumers were paying more than 50 per cent and 30 per cent higher tariff respectively compared to their actual cost of supply. However, the Appellate Tribunal for Electricity (ATE), after hearing the plea of industrial buyers about levy of higher cross-subsidy in Odisha, has ordered that henceforth, cross subsidy charges should not go beyond 20 per cent over and above the actual cost of supply.
In November 2011 also, the central power ministry had asked all state governments to implement open access norms in power marketing and distribution to bring in competition in the market, which is dominated by debt-ridden distribution companies (discoms), mostly run by state governments and in few states, by private companies.
However, some state governments had interpreted the order as an advisory and ignored to implement the reforms fearing loss of revenue in case industrial consumer switch to private power producers.
The central power ministry, after due consultation with the attorney general of India had issued a fresh directive in April 23 this year asking state governments to order their power regulators about implementing the provisions, which are mandatory as per the Electricity Act, 2003.