Power regulator seeks ring fencing of state load dispatch centres

Written by Sanjay Jog | Nagpur | Updated: Aug 14 2009, 05:53am hrs
In a significant development, the Central Electricity Regulatory Commission (CERC) has advised the Centre to take up with the states the separation of management and controlling interests between the entities operating state load despatch centres (SLDCs) and the entities engaged in distribution/trading activities to have a non-discriminatory open access. It has emphasised the need for ring fencing the SLDCs.

CERC chairman Pramod Deo through its communication of August 11 to the power secretary HS Brahma said that CERC does not have jurisdiction over government owned intra-state trading entities engaged in distribution or trading businesses. Many states have these trading entities, which share controlling interests with the entities operating SLDCs. However, EA 2,003 provides that the SLDCs and state transmission utilities (STUs) should not engage in the business in trading and due to this in number of states SLDCs are not able to function in a non discriminatory manner while considering open access requests.

Non discriminatory open access has been provided in the EA, 2003 as one of the most important reform measures for promoting competition in the energy sector. However, at the same time genuine concerns are being expressed on slow and tardy implementation of non-discriminatory open access. Addressing these concerns is a pre-requisite even for expanding open access in inter-state transmission because almost all the consumers and a large number of generators are connected to state-level T&D networks, Deo said.

Further, the chairman said SLDCs have a critical role in operationalising open access in view of the fact their concurrence is a pre-requisite for permitting open access. There is a broad consensus presently that SLDCs in most of the states are not able to function impartially because SLDCs are not insulated from conflicting commercial interests of the state government owned distribution utilities and trading companies on the one hand and open access consumers and privately owned generators on the other hand.