Issues like amendments to the Electricity Act 2003, relating to section 11 invoked by states to curb open access; single buyer model; appraisal of regulators, etc are likely to dominate the discussion between power minister Veerappa Moily and the Forum of Regulators (FOR), a representative body of power regulators, on August 29.
The power ministry has recommended the inclusion of a new section, 89 (6), to carry out annual review of regulatory commissions by a multi-disciplinary body, which would also report to the appropriate governments for necessary action. A new section, 153, would enable state governments to constitute special courts and mobile police stations as may be necessary for speedy trial of offences.
The power ministry, under section 64, has proposed every state commission has to ensure that annual performance review, true up of the past expenses and annual revenue requirement and tariff determination are conducted annually as per the time schedule specified in the regulation. In the event of delay in submitting the annual revenue requirement, truing and annual performance review by one month, the appropriate commission must initiate suo moto proceedings for tariff determination, and should ensure automatic passing of any increase in the power purchase cost arising out of the rise in fuel cost..
Section 11 reads: “The appropriate government may specify that a generating company shall, in extraordinary circumstances, operate and maintain any generating station in accordance with the direction of that government.”
“The expression extraordinary circumstances means circumstances arising out of threat of security of the state, public order or a natural calamity or such other circumstances arising in public interest, except for the implementation of open access as envisaged in the Electricity Act 2003,” the power ministry notes.
The Forum of Regulators (FoR) opines there has been a misuse of section 11 or section 108 by state governments who prohibit the sale of surplus power from a generating unit to entities outside the state. However, FoR has suggested the Electricity Act may be amended to provide greater clarity on the meaning of “extraordinary circumstances” mentioned in section 11.
Pramod Deo, chairman, Central Electricity Regulatory Commission and also of FoR, told Business Standard, “FoR, at its meetings, has held discussion on amendments to the Electricity Act 2003. We will put up our point of view during FoR’s maiden meeting on August 29 with power minister Veerappa Moily.” Deo informed that all the regulators were meeting on August 28 to discuss the strategy for Wednesday’s meeting.
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Further, FoR has argued that single buyer model should not be allowed to perpetuate, and clear timelines be provided for states to expedite reassignment of the power purchase agreements to distribution companies and for winding up the single buyer model as early as possible.
On the development of a power market, including trading and forward market as envisaged in section 66, the power ministry suggested it may be specified and be guided by the National Electricity Policy and other directions issued on the public interest from time to time.
FoR has suggested that for further development of electricity markets, there is a need for clarity in the Electricity Act and the National Electricity Policy so that jurisdiction issues regarding forward and future market products may be sorted out at the earliest.
The power ministry has proposed new provisions under section 79 (1) (k) to regulate coal prices and its transportation. Besides, section 86 (1) is proposed to promote co-generation and generation of electricity from renewable energy sources by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify for purchase of electricity from renewable sources of energy a percentage of the total consumption in the area of a distribution licensee. Moreover, the power ministry, under the same section, has proposed to define the roles and responsibilities of the distribution licensees in case of multiple licensees in the same area.
The power ministry has proposed amendment to section 14, whereby any appropriate commission may grant a licence to two or more people for distribution of electricity through their own distribution system within the same area.