DISCOMS BURDEN OPEN ACCESS POWER

State governments are watering down a crucial power sector reform initiated by the Centre which works to the benefit of consumers.

States are trying to discourage consumers from opting for the open access — where they can opt for their choice of supplier — by imposing cross subsidies and surcharges in addition to wheeling charges.

The open access system is costing distribution companies (discoms) in terms of power sales and revenue. Most discoms are in a weak financial condition and are unable to supply the domestic sector even with subsidy provided by the states.

Discoms collect cross subsidy from high tension power users to supply cheap power to the domestic sector. Without compensating the discoms, the Centre introduced the open access system.

According to the India Credit Rating Agency (ICRA), the overall open access charges are high in the range of `2.5 to `5 per unit across most key industrial states.

ICRA said the levy of cross subsidy had witnessed an upward trend over the last two years in Gujarat, Karnataka, Maharashtra, MP, UP and Haryana. It said cross subsidy continued to remain high in AP, TS and Tamil Nadu.

Gujarat, MP, Maharashtra and Haryana have imposed additional surcharge to open access consumers. Recently TS also imposed additional surcharge on open access consumers at the rate of `3 per unit. The cross subsidy is different to each HT consumer depending on their consumption of power.