UP, Karnataka cold to open access policy for power

Written by Noor Mohammad | Noor Mohammad | New Delhi | Updated: Oct 21 2013, 14:01pm hrs
While Tamil Nadu, Punjab, Haryana and Gujarat have embraced the open access policy for bulk consumers, Uttar Pradesh, Karnataka and others continue to drag their feet on it despite facing huge power shortages.

States can not only mitigate their power shortages, but also reduce their power procurement costs by allowing open access ( OA) facility to bulk consumers (those with more than 1 mw demand).

Andhra Pradesh is the latest to join the OA bandwagon. Taking cue from Tamil Nadu, AP has adopted the OA route to overcome its chronic power shortages. As many as 616 industrial and commercial units in AP took their power supply from sources other local discoms in September, a big jump for a state which had not even a single OA consumer to boast of just a year ago.

The state has bowed to the industry's demand for open access as it is not in a position to meet its electricity requirement. AP now has the highest number of OA consumers among all states, a position that was held by Tamil Nadu until recently.

States like Punjab, Haryana, Gujarat and Rajasthan have also seen increase in number of OA consumers in the past one year.

The number of OA consumers has increased from 299 to 307 in Punjab,106 to 166 in Haryana, 140 to 275 in Gujarat and from 98 to 142 in Rajasthan.

However, Uttar Pradesh, Maharashtra, Madhya Pradesh and Karnataka, major power consuming states, continue to drag their feet on the implementation of OA provisions, as per data available with the Indian Energy Exchange ( IEX) that accounts for 97% of volume of electricity sold through Exchanges in India.

The Electricity Act 2003 mandates all states to allow open access to bulk consumers ( those with more than 1 mw demand) from January 2009.

UP has not allowed even a single industrial or commercial unit the facility of open access, though regulations are in place, industry sources said.

Maharashtra has implemented open access in letter but not in spirit. It has allowed open access facility to just six consumers so far.

Similarly, Madhya Pradesh and Karnataka have only 14 and 32 OA consumers, respectively.

These states, which are incurring high commercial losses in power distribution due to factors like theft, can make big savings if they allow OA facility to their bulk consumers who can benefit from low prices ruling in the open market ( Average sales price of electricity at IEX on Wednesday was Rs 2.45 a unit).

For example, the average power procurement of UP Power Corporation ( UPPCL) was Rs 5.94 a unit in 2012-13. Further, one-quarter of power procured by the discom was lost in distribution.

Given that, the state can make a significant savings by allowing open access facility to bulk consumers.

UP is facing peak-hour power shortage to the tune of 2,800 mw. But rather than using the OA facility to cut its operational losses, the state is tying up costly power under long-term contracts.

According to industry sources, UP is considering buying 2,875 mw electricity from generators like Indiabulls, Jindal Power and Lanco at the price range of Rs 6 a unit.

The state has also agreed to buy 2,100 mw power from various companies including KSK Energy, Moserbaer and Navyug in the price range of Rs 5.4-5.8 a unit.