The Hindu Business Line : `Electricity regulators have limited role to play'

THE Chairman of West Bengal Electricity Regulatory Commission, Mr S.N. Ghosh, is uncertain about the usefulness of electricity regulatory commissions (ERCs) operating in different States, which were set up in compliance with the Electricity Act, 2003.

His worry is based on the fact that there is no cohesive approach among ERCs towards framing legislative, administrative and legal policies in determining rational (actual) tariff structure for electricity.

Speaking at a meeting on the `Changing power scenario: Role of regulatory authority,' organised by the Bengal National Chamber of Commerce and Industry, Mr M. Ghosh said that ERCs at present had a limited role to play in the fragmented and regionalised market. Generation and transmission were still confined to specific regions in the absence of total coverage of the country through transmission network. Unless a "single market" was created for electricity, ERCs would not be able to act in a cohesive manner, he felt.

He felt that power generation capacity would have to be made with proportionate forward integration of the transmission and distribution systems. Unless this approach was followed, he felt that the power availability situation would not improve in the country. He said that one had to keep in mind the fact that electricity had become a tradable commodity instead of being just a development input.

In spite of the amendment of electricity acts on three occasions since 1948 to 2003, Mr Ghosh observed that the State still enjoyed the authority to dominate the power generation sector because generation was a capital-intensive activity. Under the Central Electricity Act, 1998, private investors were allowed to set up thermal power projects for captive consumption purposes. But the progress had not been made substantially in this front largely because the operation was capital intensive in nature.

Under the new Act, 2003, generation had been delicensed , captive generation had further been encouraged, open access had been given to transmission and distribution and trading of power had been accorded a licensing activity. Under the new Act, there was no bar for any investor to undertake generation, transmission and distribution in an area where a corporate outfit was currently operating. In the prevailing complex nature of electricity business, ERCs had to frame policies and exercise their quasi-judicial powers in the greater interest of the consumers, generating units and operators of transmission and distribution activities.

However, the BNCCI president, Mr S.K. Chakraborty urged WBERC to get electricity providers to further reduce transmission and distribution losses.