State Electricity Regulatory Commissions (SERCs) want to be very cautious before implementation of power ministry’s suggestion on providing open access for consumers with a demand for 1 MW and above. The Maharashtra Electricity Regulatory Commission (MERC) has taken a lead to solicit suggestions from members of public and all stakeholders in the state.
MERC, in its public notice, admitted one of the functions was to introduce Open Access in distribution under Section 42 of the Electricity Act, 2003, and to consider all other attendant provisions, including that of determination of wheeling charges and surcharge thereon for open access consumers. However, MERC further said, “As far as Open Access in distribution is concerned, the law envisages introduction of such Open Access in phases with due consideration of the operational constraints and existence of cross-subsidy between consumer categories. At the same time, MERC is required to protect and safeguard the interest of consumers. This responsibility of phased introduction of open access in distribution has been bestowed on State Electricity Regulatory Commissions.”
Hence, the MERC said it deemed it fit to initiate solicitation of views and suggestions from the members of public and from all stakeholders in the state of Maharashtra on the four broad findings rendered under the opinion of the Union Ministry of Law & Justice and other relevant and attendant issues. The objective of the public notice was to generate a debate and seek comments of the stakeholders.
MERC chairman V P Raja told Business Standard, “We want to proceed a little cautiously to calibrate this entire process to avoid confusion which can otherwise be questioned later.” Raja said the issue of open access in the wake of the power ministry's letter issued on November 30 last year was discussed in three successive meetings of the Forum of Regulators (FoR). He informed the FoR, a representative body of the power regulators, had already released a detailed paper on operationalisation of open access.
Raja said, “Issues relating to providing open access for 1 Mw and above need a wider discussion. If state electricity regulatory commissions stop fixing the tariff, what will state distribution companies do? Can they sit across and fix the tariff? A private sector party can strike a deal. There are operational issues and, therefore, views of all the stakeholders have been invited,” he added.
The power ministry, in its letter, dated November 30, had clearly stated that once a consumer becomes an Open Access consumer, the SERC would no longer fix the energy charges to be paid by such a consumer, but would continue to fix the wheeling charges and surcharges in accordance with the provisions of the Electricity Act 2003. Subsequently, the power ministry, under section 107 of the Electricity Act 2003, directed the Central Electricity Regulatory Commission (CERC) on April 23, for the operationalisation of Open Access. CERC in its response has clarified that it has jurisdiction over Open Access in inter-state transmission and has created the necessary regulatory framework through its regulations.
Santanu Dixit, coordinator, Prayas Energy group, welcomed MERC's move. He said, “In fact, before proceeding with any tariff revision-related decision, a clarity on Open Access issue is a must. We have asked the MERC to clarify its position on power ministry’s letter of November 30, 2011, before proceeding with any petition on tariff revision filed by distribution licensees, as it affects the very basis for petition and has a very large impact on recoverable revenue and cost of licences.”
