PSERC rejects power ministry's advice on open access to consumers

05 October, 2012

Punjab State Electricity Regulatory Commission (PSERC) has rejected the advice of union Power ministry for open access to consumers having connected load of 1 MW and above.

ELEVEN PETITIONS have been filed before PSERC representing most of the industrial consumers in Punjab with a connected load of 1 MW and above for setting aside the notices issued by Punjab State Power Corporation Limited (PSPCL) during the month of March 2012, regarding operationalization of open access in power sector.

The PSPCL notice stated that in view of the instructions of ministry of power, all one MW and above consumers shall be deemed as open access consumers and as such PSPCL will have no universal obligation to compulsorily supply power to such consumers.

Ministry of Power in its letter on November 30, 2011 addressed to State Electricity Regulatory Commissions and several others has indicated that the concept of open access introduced in the 2003 Act viewed to promote competition. This was perceived as a critical feature for development of power market. Ministry of Power based its decision on the views of the Ministry of Law and Justice, which have been crystallized in consultation with the advice of Attorney General of India Vahanti.

PSERC has concluded that the opinion of the Ministry of Law and Justice, circulated by Ministry of Power is not as per the provisions of the Act as it is linking the universal obligation of a distribution licensee to supply power under section 43 with the rights of a consumer under section 42.

PSERC based its decision on the basis of an earlier decision of Appellate Tribunal for Electricity and held that PSPCL has universal obligation to supply power to all consumers in its area of supply including those availing open access.

This decision has given relief to over 300 Open Access consumers in Punjab who were being forced to either choose PSPCL or open access as only source of power by the Ministry of Power. The decision thus again introduces competition between open access power and PSPCL power, forcing the latter to economize on its cost of operation.