The Hindu Business Line : Power consumers set to get choice of distribution utility — 11 State ERCs issue open access guidelines

A NEW era of choice for consumers of electricity is in sight, with State Electricity Regulatory Commissions (SERC) of 11 States, including Andhra Pradesh, Assam, Delhi, Gujarat, Madhya Pradesh, Rajasthan, Karnataka, Maharashtra and Uttaranchal issuing draft or final guidelines for allowing open access in distribution.

The guidelines would act as the platform for enabling customers, starting with bulk users, to choose a power distribution utility of their choice.

This is expected to break the monopoly of the State Electricity Boards (SEB) as the sole supplier of power to retail consumers in most States.

Amidst fears that the SEBs may lose their best customers, mostly industrial and commercial consumers, who are likely to be weaned away by new players, the SERCs have veered around to the view that they would usher in the open access regime in a graded manner based on the levels of consumption of consumers, starting with the bulk consumers.

Once the guidelines are in place, high-paying customers would effectively have the option to either stick with the existing supplier of power — SEBs in most States — or to shift to another supplier of power, which could be a trader such as PTC India Ltd, a second distribution licensee or even directly hook on to a power generator.

While Rajasthan, Karnataka, Maharashtra and Uttaranchal are among the States where the power regulators have issued final guidelines, SERCs in Andhra Pradesh, Assam, Gujarat and Madhya Pradesh have issued draft guidelines, Power Ministry officials said.

Under the Electricity Act 2003, SERCs are required to frame guidelines for allowing open access in distribution for consumers taking up to 1 MW of power (bulk consumers) in a graded manner.

Under the Act, consumers migrating from the existing licensee in an area to a utility of its choice would have to shell out a surcharge to the former.

The Forum of Indian Regulators (FOIR) — a body of Central and State regulators — has already voted for the adoption of a specific methodology, the `avoided cost method', for computing the surcharge that would have to be shelled out by a consumer migrating to the supplier of his choice.

The avoided cost method was recommended by FOIR as it met the twin objectives of safeguarding the financial viability of the licensee and promotion of competition, over other methods.

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