The task force chaired by the Planning Commission member BK Chaturvedi, in a serious bid to give push to the open access in the power sector, has recommended that Central and States electricity regulatory commissions (ERCs) should be directed/advised by the appropriate governments to comply with the statutory requirements relating to open access in a time bound manner.
In particular, they must prescribe the open access surcharge in accordance with the provisions of the Tariff Policy notified by the Central government under Section 3 of the Electricity Act.
Independent power producers (IPPs), captive and small generators should be allowed to bring power into the market without any hindrance in grant of open access. This is important at a time when peaking and energy shortages are increasing. The industry sources claimed that open access so far is a myth and thus demanded that the task force recommendations be implemented in true spirit.
The task force has called for a review of the scheme of unscheduled interchange (UI) charges to ensure that UI does not become a vehicle for trading by default and gaming in scheduling is checked.
A mechanism should be evolved to facilitate grid constituents and off takers to verify and take corrective measures against gaming by anyone. Any grid disturbances attributable to such indiscipline by any utility should invite penalty that may include suspension/termination of the licence and appropriate regulation of their errant behavior.
Sources said the task force has made a strong pitch for an amendment to section 62(1)(a) of the Electricity Act to make it explicit that supply of electricity by a generating company to a distribution licensee includes supply through an electricity trader.
This would ensure the benefit of regulated prices for all consumers buying electricity from their distribution companies. Suppliers of surplus power would be free to sell directly to consumers who wish to avail of open access at mutually determined prices. The task force noted that the amendment to the Electricity Act could take time, meanwhile, the power ministry, in consultation with Central Electricity Regulatory Commission (CERC), may evolve suitable policies and measures to check unregulated and exploitative prices in inter state sales of electricity. This may include capping of prices by CERC under the provisions of section 62(1)(a) of the Electricity Act.
According to the task force, section 62(1)(a) empowers the appropriate commission to cap electricity prices to deal with price rise in scarcity conditions. The provisions of this section are sufficiently attracted because of widespread shortages in peak and energy demand. The appropriate commissions should, therefore be advised to exercise their powers and perform their duties under the aforesaid Section. If necessary, the Tariff Policy should also be suitably amended to reflect the above.
Further, some SERCs have fixed trading margins for intra-state transactions relating to electricity that is ultimately consumed within the state. However, no such margin is being fixed where the ultimate consumer is outside the state. Such discrimination is untenable and violates the provisions of the Constitution of India that prohibit restrictions on inter- state trade. The Tariff Policy should be suitably amended to address this issue.
