Open Access and Trading

The Electricity Act, 2003 which has come into force from 10th June, 2003 repeals the Indian Electricity Act, 1910; Electricity (Supply) Act, 1948; and Electricity Regulatory Commissions Act, 1998. In view of a variety of factors, financial performance of the state Electricity Boards has deteriorated. The cross subsidies have reached unsustainable levels. A few States in the country have gone in for reforms which involve unbundling into separate Generation, Transmission and Distribution Companies. To address the ills of the sector, the new Act provides for, amongst others, newer concepts like Power Trading and Open Access.
Open Access on Transmission and Distribution on payment of charges to the Utility will enable number of players utilizing these capacities and transmit power from generation to the load centre. This will mean utilization of existing infrastructure and easing of power shortage. Trading, now a licensed activity and regulated will also help in innovative pricing which will lead to competition resulting in lowering of tariffs.

On the basis of location of buying and selling entity, the open access is categorized as:

Inter State Open Access: When buying and selling entity belongs to different states. In this case CERC regulations are followed. It is further categorized as:

  1. Short Term Open Access (STOA): open access allowed for the period of less than one month.
  2. Medium Term Open Access (MTOA): open access allowed for a period of 3 months to 3 years.
  3. Long Term Open Access (LTOA): open access allowed for a period of 12 years to 25 years.

** If suppose you require open access for two months, then you should re – apply for STOA before the expiry of first month.

Intra State Open Access: When buying and selling entity belongs to same state. In this case SERC regulations are followed. It is further categorized as STOA, MTOA, and LTOA and the duration of which depends on the respective state open access regulations.

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