Date:05/05/2005 URL: http://www.thehindubusinessline.com/2005/05/05/stories/2005050503290100.htm

Back Guidelines for choice of power distributors by June

Anil Sasi

New Delhi , May 4

CONSUMERS may soon be able to choose the utility they would like to draw their electricity from.

The power regulatory establishment across the country has set itself a deadline of June 2005 for finalising the distribution open access norms for retail consumers, starting with bulk users of power.

The guidelines would form the basis for consumers drawing up to 1 MW of electricity to select the power distribution utility of their choice, amongst service providers in a State or a particular distribution zone. The move is expected to break the monopoly of the State Electricity Boards (SEB) as the sole supplier of power to retail consumers in most States and provide a boost to more number of power players applying for distribution licences in various states.

With the exception of Delhi, Chhattisgarh and Assam, all other States have already finalised either the draft or final guidelines for allowing open access in distribution.

At a meeting of the Forum of Indian Regulators (FOIR) last week, the State Electricity Regulatory Commissions (SERCs) of the three States have also said they would be, in line with their commitment to the Electricity Policy, come out with final guidelines by June this year.

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 first.

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

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 nominal surcharge to the former.

The FOIR — a body of Central and State power 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 over other methods, as it met the twin objectives of safeguarding the financial viability of the licensee and promotion of competition.