Power consumers like the micro, small and medium enterprises (MSME) who consume 1 MW or more may soon have a supplier of their choice. Choice can be made on the basis of lower tariff in a particular region.
The Government is all set to roll out open access to power nationally once the B.K. Chaturvedi Committee submits its final report next week.
The provision for open access was made in the Electricity Act 2003. Any consumer with consumption of 1 MW or more is eligible for open access.
Experts feel that such a move will be of help especially to MSMEs, which will be able to save money by opting for cheaper electricity. Earlier, it was proposed that any consumer with 1 MW, as on January 27, 2009, could apply for open access.
“The Government has agreed in-principle. Now the logistics have to be sorted out. We hope the Chaturvedi Committee will be of help in that,” a senior Government official told Business Line . However, it is difficult to give an exact timeframe for implementing the new system, he added.
Open access is likely to enhance competition in transmission and distribution, as well as improve efficiency in supply for the consumer.
This will be the Chaturvedi Committee's second report on the issue. The panel gave its first report in 2009. Accordingly, the Power Ministry drafted a Cabinet note but withdrew the same without giving any reason. However, after a lot of deliberation, the Government re-assigned the Chaturvedi Committee to assess the feasibility of open access and suggest ways to implement it.
Sources confirmed that the Power Ministry still had some reservations on the issue. Earlier, the Ministry had pointed out that State Electricity Boards had only 15 per cent surplus power, mainly for contingency use. So, technically there was no surplus power for open access.
The Power Ministry is also apprehensive of the higher cost of inter-State transmission. Also, the Ministry is of the opinion that open access needs a strong transmission network. This would require more than one company in a particular area, which is not commercially viable.
However, according to sources, the Chaturvedi Committee is working on a few models to address the Power Ministry's objections. Once the report is accepted, the Power Ministry will move it to the Cabinet for approval, after which it can be implemented, they said.