1. OPEN ACCESS
1.1
The Electricity Act 2003:
An Act to
consolidate the laws relating to generation,
transmission, distribution, trading
and use of electricity
and generally for taking measures conducive to development of
electricity industry, promoting
competition therein, protecting interest of
consumers and supply
of electricity to all areas,
rationalization of electricity
tariff, ensuring transparent policies regarding subsidies, promotion of
efficient and environmentally benign
policies constitution of
Central Electricity
Authority, Regulatory Commissions and
establishment of Appellate
Tribunal and for matters connected therewith or incidental thereto.
1.2
Open Access:
The Electricity Act, 2003 which has
come into force from 10th June, 2003 repeals the Indian Electricity Act, 1910;
Electricity (Supply) Act, 1948; and Electricity Regulatory Commissions Act,
1998. In view of a variety of factors, financial performance of the state
Electricity Boards has deteriorated. The cross subsidies have reached
unsustainable levels. A few States in the country have gone in for reforms
which involve unbundling into separate Generation, Transmission and
Distribution Companies. To address the ills of the sector, the new Act provides
for, amongst others, newer concepts like Power Trading and Open Access. Open
Access on Transmission and Distribution on payment of charges to the Utility
will enable number of players utilizing these capacities and transmit power
from generation to the load centre. This will mean utilization of existing
infrastructure and easing of power shortage. Trading, now a licensed activity
and regulated will also help in innovative pricing which will lead to
competition resulting in lowering of tariffs.
1.3
History:
The long drawn battle for Open Access in the Power Market
seems to have seen the light of the day. The Ministry of Law has conveyed its
consent to Ministry of power that all bulk power consumers (i.e. consumers with
generation / load greater than 1 MW) would be deemed open access consumers as
per Electricity Act 2003 and their tariff determination would be outside the
purview of Regulators. This is expected to open the flood gates for the power
markets in near term. The bulk consumers (1 MW above) will now be able to negotiate
their tariffs with the concerned Discom and if the tariffs are not conducive
they would be free to go and buy from the market. There were hurdles in the
implementation of this framework mainly from the Discoms for whom industrial
consumers are cash cows as they pay much higher tariffs as compared to
domestic/agricultural consumers. In fact this move is expected to bring down
the power bills for industrial consumers significantly. The loss in the revenue
of Discoms will have to be borne by domestic / agricultural consumers as the
Discoms are already reeling under losses. The law and judiciary department said
“The provisions of section 42 (3) of the Electricity Act provides that a person
requiring supply for electricity has to give notice. If the consumer intends to
use the network of the distribution companies, he has to give notice and upon
such notice to a discom, it is duty-bound to provide non-discriminatory open
access to its network. Section 42 (3) cannot be construed to mean that giving
of a notice is a pre-condition for the implementation of open access.” It said
the requirement of a notice was only to communicate the open access consumer’s
intention of using the discom’s network in line with the relevant regulations
and not to seek its permission for doing so the Union power ministry has told
all state governments, power regulators and distribution utilities to delay no
more in implementing the open access provisions of the Electricity Act, 2003.
Open access, meaning freedom to choose the supplier, was being denied for
consumers wanting 1 Mw or above, owing to a perceived ambiguity in the relevant
provisions.
1.4
Definition of “Open Access” in the Electricity
Act, 2003:
The non-discriminatory provision for
the use of transmission lines or distribution system or associated facilities
with such lines or system by any licensee or consumer or a person engaged in
generation in accordance with the regulations specified by the Appropriate
Commission”
1.5
Types of Open Access:
•
Long Term – For 12 years to 25 years.
•
Medium Term – 3 months to 3 years.
•
Short Term – Monthly basis, up to 3 months ahead
 |
Fig 1.1 Present scenario of Indian Electric Power Industry
|
a) Freedom to
buy/sell, and access to market
b) Adequacy of
intervening transmission
c)
Transmission/wheeling charges
d) Treatment of
transmission losses
e) Energy
accounting, scheduling, metering and UI Settlement.
The present level of inter-regional electricity exchange is still quite limited and the constraints or enhancing the same are the relative lack of commercial awareness with SEBs, lack of proper market mechanism (absence of tariff structure to promote merit-order operation and encourage trading of power), inadequate transmission capacity, lack of statutory provisions for direct sale by IPPs/CPPs/ Licenses outside the State, grid indiscipline and financial viability of State Utilities, among others.
The present level of inter-regional electricity exchange is still quite limited and the constraints or enhancing the same are the relative lack of commercial awareness with SEBs, lack of proper market mechanism (absence of tariff structure to promote merit-order operation and encourage trading of power), inadequate transmission capacity, lack of statutory provisions for direct sale by IPPs/CPPs/ Licenses outside the State, grid indiscipline and financial viability of State Utilities, among others.
 |
| Fig 1.2 Recent Indian Network Data |
EXAMPLE: Suppose a company from Maharashtra wants to sell 100 MW to a Discom-A in Andhra Pradesh
Following
steps need to be taken:
a) The company
and Discom-A has to agree on terms and conditions of sale.
b) The company
has to get the consent of MSEB and "no-objection" of MSERC
C) Discom-A has
to get the consent of APTransco and "no-objection" of APSERC.
d) MSLDC and
APSLDC have to ascertain transmission adequacy, and agree to arrange necessary
metering, scheduling, energy accounting and UI settlement.
e) WRLDC and
SRLDC have to ascertain transmission adequacy in their regional transmission
systems.
f) All concerned to have a common understanding about treatment/sharing of transmission losses and levy of transmission/ wheeling charges for the use of intra-State and inter-State systems.
f) All concerned to have a common understanding about treatment/sharing of transmission losses and levy of transmission/ wheeling charges for the use of intra-State and inter-State systems.
1.7
Opportunities:
1.
For Generating Company:
a.
No license required for developing a
generating station;
b.
Could sell power to any person through
open access;
c.
Easy change in purchaser in the event of
default in honoring the contract by the purchaser.
2.
For Consumers:
a.
Buy power from anywhere – could explore
cheaper sources; especially useful for high demand industrial / commercial
consumers.
b.
Industrial houses could consolidate
power supply to plants at various locations and build captive power plant to
achieve economy
Open Access
Capacity Sought, Approved & Implemented
|
||||||
State
|
Application Received
|
Capacity (MW)
|
Approved
|
Capacity (MW)
|
Cases Implemented
|
Capacity Implemented
|
Andhra Pradesh
|
9
|
130
|
2
|
44
|
2
|
244
|
Chhattisgarh
|
14
|
333
|
6
|
66
|
5
|
53
|
Gujarat
|
15
|
871
|
15
|
871
|
15
|
871
|
Haryana
|
2
|
573
|
0
|
0
|
0
|
0
|
Himachal Pradesh
|
3
|
32
|
0
|
0
|
0
|
0
|
Jharkhand
|
1
|
40
|
0
|
0
|
0
|
0
|
Kerala
|
1
|
30
|
1
|
30
|
0
|
0
|
Madhya Pradesh
|
29
|
56
|
29
|
56
|
29
|
56
|
Orissa
|
1
|
5
|
1
|
5
|
1
|
5
|
Punjab
|
2
|
21
|
2
|
21
|
2
|
21
|
Rajasthan
|
29
|
259
|
12
|
165
|
12
|
165
|
Tamil Nadu
|
12
|
1764
|
0
|
0
|
0
|
0
|
Uttar Pradesh
|
5
|
46
|
5
|
46
|
5
|
46
|
West Bengal
|
4
|
86
|
3
|
36
|
0
|
0
|
Table 1.1 Present scenario of Indian Electric Power Industry
1.8
Advantages of Open Access:
•
Gives
freedom to user to buy power from any supplier
•
Assessment of
Transfer Capability
•
Balancing
mechanism
•
Methodology
for transmission charge sharing
•
Treatment of
transmission losses
•
Transparency
and non-discriminatory implementation
•
Congestion
management
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