In an ‘opinion statement' that ought to bring cheer to bulk consumers of electricity, the Law Ministry has said that power distribution companies (discoms) cannot prevent the bulk consumers from purchasing power from elsewhere.
Such ‘open access consumers' — defined as those whose consumption exceeds 1 MW — need only to give a notice to the distribution company stating that they intend to buy electricity from the market. The distribution company is “duty-bound” to provide access of its network to the consumers.
The Ministry was responding to a request for an opinion by the Power Ministry over a few issues relating to bulk consumers of power. The opinion was issued a few days back.
In a communication to disseminate the Law Ministry's opinion, the Power Ministry has said that the “the requirement of the notice is only to communicate the open access consumers' intention of using the distribution company's network and not to seek its permission for the same.”
Positive move
While it is not clear if the Law Ministry's opinion is binding on power discoms, it is regarded as a positive move as for as the bulk (industrial) consumers of power are concerned, because they have been suffering at the hands of the discoms.
In Tamil Nadu, for instance, open access consumers have to seek the approval of the State discom, TANGEDCO, for purchasing power from the open market. The approval takes about a month to come. While seeking the approval, the consumers have to declare how much of power they would buy from the market and for any enhancement they have to again go back to TANGEDCO for permission.
The industry in the State is peeved that it is not allowed to freedom to undertake open market purchases even during power-cuts. Industry sources say that a similar situation exists in several other States as well.
Furthermore, the Law Ministry has said that the State Electricity Regulatory Commission has no jurisdiction over fixing the energy charges for them.
“It is quite clear that once a consumer becomes an open access consumer, the State (Electricity Regulatory) Commission shall no longer fix the energy charges to be paid by him, but will continue to fix the wheeling charges and surcharges in accordance with the provisions of the Act,” the Law Ministry has said.
On the flipside, the distribution company is also absolved of its obligation to supply power to such open access consumers (as mandated by Section 43 of the Electricity Act) and is not bound to supply power to such bulk consumers, the Law Ministry opined.