Competition is one of the major key to revive ailing power sector of the country. To increase competition in the sector, open access policy was enacted in the Electricity Act 2003 (EA 03). As per EA 03, open access means "the non-discriminatory provi- sion for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in gener- ation in accordance with the regulations specified by the Appropriate Commission ".1 Before the open access policy, consumers did not have any choice for power supply other than buying it from the state utility. Even if he was not happy with the quality of power supply or the price of power, he was enforced to be connected with respective state utility only. However, after the enactment of EA 03 and in turn the open access policy, any consumer who has more than 1 MW load can choose their power supplier. Also, any captive power generator can supply power using states' transmission and distribution infrastructure. Power trading which was started in 2001 to cover the deficit of power in one region by supplying power from other surplus region was supposed to get boost after the introduction of open access policy [1]. There are two ways of power trading, either through bilateral market or through spot market at electricity exchanges. lEX was the first power exchange in India which was set up in 2008 to create electricity market at national level (Economic Survey 2015-2016). At exchange, price and quantum bids are submitted by both electricity suppliers and buyers where first bids are submitted by seller and second by the buyers, and the intersection of two decides the market clearing price and market clearing volume [2]. A buyer who wants to purchase electricity in spot market or from bilateral market, first has to get open access permission from the concerned utility and regu- latory commission. This is required as concerned utilities will need to assess the availability of transmission network capacity. An open access consumer has to pay different charges such as transmission charges, wheeling charges, and cross-subsidy charges. Transmission and wheeling charges need to be paid for the usage of trans- mission and distribution network and cross-subsidy charges are paid to compensate the loss of cross-subsidy to utility which that consumer was paying to subsidize the agricultural category of consumers.2 Cross-subsidy charge increases the overall cost of power buying from the exchange to the consumer. It takes away all the economic benefit of buying power from the exchange [ 1 ].
展开▼
