A decade on, power ministry wants to try once more
Open access in electricity supply is the buzzword. Again. BJP’s chief ministerial hopeful Vijay Goel announced his plan to cut power tariffs in Delhi by bringing in more competition ‘like we did in the telecom sector’ at Narendra Modi’s rally in the capital last week. And power minister Jyotiraditya Scindia said he planned to separate the carriage and content business in the electricity sector, allowing even households, eventually, to buy electricity from the firms of their supply. So, instead of being tied to a monopoly supplier who has little incentive to lower tariffs— these are fixed on the basis of costs by the electricity regulator—the consumer can opt for buying electricity from another supplier; the new supplier B will pay supplier A a ‘wheeling charge’ for using his power lines into the consumer’s house. So, though one firm owns the power line coming into a customer’s house, you can bring in competition and hence reduce prices.
If all of this sounds like déjà vu, it is because it is. The Electricity Act of 2003 laid down a timeline for making open access mandatory for large consumers, who used more than 1 MW of power, within 5 years. Since allowing this could lead to power suppliers losing their most lucrative customers, whose payments help subsidise households and agriculture consumers, the Act said there would be a cross-subsidy surcharge to take care of this – so, supplier B would pay supplier A a cross-subsidy surcharge along with a wheeling charge. Problem is, this never happened. But those in favour of open access, the Planning Commission primarily, kept at it and, in December 2010, the Attorney General okayed this when he said electricity regulators would no longer set the tariffs for bulk consumers, they would just set the wheeling charges and the surcharge. There were more delays and it took till the end of 2011 for the matter to be notified. And yet, almost 2 years later, the power minister is once again talking of open access. The pity is that despite okaying yet another mammoth bailout for state electricity boards, the power ministry has still not managed to make open access happen, it is still just talking about it.