Professionals urge CERC to encourage competition in mkt

Written by Sanjay Jog | Mumbai | Updated: Mar 6 2009, 04:55am hrs
Professionals including former power secretary RV Shahi, former Trai chairman Pradeep Baijal and former power regulator VS Ailawadi, in the largest interest of consumers, have joined hands to encourage competition in the electricity market. The trio, under the aegis of IDFC Advisory Board, has filed a petition before the Central Electricity Regulatory Commission (CERC) in this regard.

According to them, the present arrangement of short term of up to 3 months and long term of 25 years needs to be modified after taking into account the practical requirements of the generators, industry and consumers. Open access should be available for the following periodsshort term for up to 3 months, intermediate term raging from 3 months to 5 years, medium term ranging between 5 years and 15 years and long term of more than 15 years. This would ensure contracts (trading, transmission) for intervening durations (3 months up to less than 25 years) and increase competition among various players in trading/generating sphere to the benefit of the end user.

The commission should create a model structure for ring fencing load dispatch centers (LDCs) to ensure their functional autonomy and facilitate independent functioning of the LDCs in line with the Electricity Act 2003 and National Electricity Policy, they said.

CERC should create a forum of regulators to work with the state governments and help create a separate board structure for governance of LDCs on the lines of wholly owned subsidiary against the prevailing system of regional load dispatch centres (RLDCs) and national load despatch centre (NLDC), they add.

Further, there are conflicting views on the issue of right to evacuation via dedicated transmission by the captive power plants (CPPs). This view of CERC virtually defeats the objective of section 9 of Electricity Act (EA) 03, which allows availing open access facility guaranteed in the EA. Therefore, CERC may review its ruling and encourage choice for supply of electricity to end users by removing barriers in the transmission systems.

The CERC should use its provisions under section 36 for fixing fair and reasonable rates for the use of intervening facilities in case of open access users by formulating new regulations. Also, CERC should exercise its powers under Section 61 to guide the state commissions by prescribing principles and methodologies for determining tariffs applicable to generating companies and transmission lines. In order to prevent pan caking of transmission charges, the charges for intermediate and intervening transmission systems should be prescribed by the CERC.

Also, the petitioners urged that in the interest of uniform and reasonable charges/fees, CERC should specify the fees and charges payable for the intervening transmission/inter-connection facilities in state or regional transmission networks within one year. Besides, it is necessary for CERC to take initiative and ensure that in the use of transmission facilities under open access, disputes are minimised via new regulations.