Switching To Choice

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p><p><span class='dropthecap'>T</span>he Maharashtra Electricity Regulatory Commission's (MERC) clarification that consumers across Mumbai can switch over to Tata Power Company (TPC), whose power costs 13-14 per cent less than Reliance Infrastructure, may have come as a shock for the Anil Ambani group company. But analysts say that MERC's remark has only reiterated the Supreme Court ruling that backed the ‘Open Access' system, which allows consumers to choose their supplier.</p><p>In 2008, BSES (later Reliance Energy) had fought in the Supreme Court and lost against TPC's bid to supply power to consumers in the BSES licence area. The court, ruling on a petition filed in 1998, observed that TPC could distribute power directly to bulk and retail customers.</p><p>Despite constraints like higher "wheeling charges" to Reliance, and fresh investments in a distribution network, TPC had begun supplies in a limited manner, which now would get a push from consumers.</p><p>This will make Mumbai the only place where open access is operational in letter and spirit.</p><p>Girish Mahalingam, associate director of Fitch India, says open access brings in higher competition and sectoral efficiencies. Despite the fact that open access was envisaged way back in 2003 by the Electricity Act, its implementation has been tardy due to vested interests from state electricity boards, which imposed exorbitant cross-subsidy surcharge — the fee for switching over. The Centre may now amend Section 11 of the Electricity Act 2003 that would bring uniformity on these counts and, hopefully, openness in access too.</p> <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script> (This story was published in Businessworld Issue Dated 10-08-2009)