Open access to power cleared

After hanging fire for years, the much-hyped open access system in the power sector is set to see the light of day with the Ministry of Law giving it a go-ahead and seeking immediate implementation.

“All 1 megawatt (mw) and above consumers are deemed to be open access consumers and that the regulator has no jurisdiction over fixing the energy charges for them,” the Ministry of Law said in a note to the Ministry of Power.

While merchant power producers are likely to be hurt with the merchant rates getting depressed to some extent, industry has cheered the move. The move is expected to bring much needed relief to large consumers in case they are not satisfied with their supplier. Besides, once implemented it is expected to bring down power tariffs across the country.

“Open access was the main plank of the Electricity Act 2003 but has seen the slowest implementation rate out of all major moves of proposed in the Act,” said Ashok Khurana, director general, Association of Power Producers. He said the association lauds the move and would now like to see the implementation of the proposal in spirit.

Khurana, who has been a proponent of open access since the time the new Electricity Act was mooted, said tariffs will come down and consumers will get to choose their supplier as competition will now increase.

“This will not only bring in more accountability from the supplier, but will also ensure improved service and better demand management,” he said.

Currently, the move is to deem all 1 mw and above consumers eligible for open access. However, experts feel eventually it will percolate down to even lower levels.

“This will be a complete game changer for the power sector once implemented. The cost of generation will automatically be regulated and under check despite the fuel used for generation,” said Jayant Deo, chairman of Indian Energy Exchange.

According to the Act, a consumers’ bill will have three parts - wheeling charge, cross subsidy charge and energy purchase charge. While the first two will be fixed, the last one is where the consumers will get to choose in case he is dissatisfied with the supply.