Line of control

New Delhi, Jan. 16: The Union power ministry will soon unveil a strategic paper on transmission and open access.

The open access model allows power generators like National Thermal Power Corporation (NTPC) to enter into a contract with distributors or large consumers without the need for intermediaries like state electricity boards (SEBs) and vice versa.

This means that a group of consumers will have the option of purchasing power either from the generation company or intermediaries, such as traders or distributors.

Under the open access regime, customers are free to buy the power of their choice, even though another company owns the electric wires to their houses. The main merit of this model is that it provides a better platform, which eventually helps bring down the cost of supply.

A draft note has been circulated to SEBs and Power Grid Corporation of India Ltd, seeking their comments. The Central Electricity Regulator Commission (CERC) and its state counterparts would also be asked to submit their observations.

According to sources in the ministry, the issue is likely to be taken up at the next meeting of the group of ministers on power. The two matters, of open access and transmission pricing, are important parts of the new Electricity Act, 2003.

A senior power ministry official said, ?The transmission of power and its pricing are issues that have not received attention since they are yet to take off in a big way. The transmission sector is in the middle of a transitional phase with respect to development of the power sector.?

Worldwide, the regulatory system allows the transmission pricing mechanism to be formulated to help companies not only to recover the amount spent but also encourage investment in the infrastructure for the overall development of the electricity sector.

According to PowerGrid, the transmission system and its rational pricing mechanism are vital for the smooth implementation of market-driven framework. At present, central power utilities are involved in litigation over the tariff norms fixed by the CERC for open access.

PowerGrid, in association with the World Bank, is organising a two-day international conference on ?Open access and transmission pricing in restructured electricity market? from Monday.