Maharashtra govt dislikes concept of open access in power
Open access is the right of large electricity consumers to buy cheaper power from the open market. The idea is that they should be able to choose among competing power suppliers, instead of being forced to buy from the (invariably state-run) electric utility monopoly. It is part of the Electricity Act, 2003, but progress on it has been slow due to immense resistance from state governments.
Maharashtra is an example. The Maharashtra Electricity Regulatory Commission (MERC) has put out draft regulations, invited comments on these and is processing the responses. Kindly stop, the state government has said.
In a letter dated July 31 to MERC, state power secretary, Ajoy Mehta, has said open access could adversely impact small consumers and lead to huge profits for developers and other consumers with a capacity to pay.
Mehta, also managing director of the Maharashtra State Electricity Distribution Company (MahaVitaran), said while the government appreciated the authority of SERC to rule on such topics, it was also sensitive towards protecting the larger interest of consumers.
Mehta also told Business Standard: “It will not be ethical on the part of SERC Chairman V P Raja, who completes his term in September, to give judgements on key issues raised by MahaVitaran. These issues have a larger long-term impact on consumers.”
Raja said he’d stopped hearing new cases since Monday, as he was demitting office on September 4.
“However, I am continuing to sit in the bench during hearing of part-heard cases. But such cases will be postponed for a final order as the hearing can also take place after completion of my term. Consultation between SERC and the state government does take place. SERC will certainly discuss the issues raised by the state power secretary in his communication, as the government is an important player.”
Since cross-subsidisation is an important component of government policy, state governments are wary of paying consumers, such as industries, escaping from their ambit. Nor are they keen to see competition with other suppliers beyond a point.
Mehta’s letter adds: “Many prime consumers are (already) availing the benefit of open access. This will have a huge financial impact on MahaVitaran and, consequently, on the common consumers. Process of public hearing on the comments received from stakeholders (should) be initiated prior to finalisation of these regulations.”
Allowing open access to wind power-based projects was leading to high profits for developers at the cost of small consumers, his letter said.
On competitive bidding, Mehta has said: “These issues have long-term implications and can lead to an adverse impact on the tariffs (rates) of consumers and at the same time, lead to unwarranted profits to certain developers and large players.”