Transco loses out to open access

Hyderabad: The open access system introduced by the Central government in the power sector is resulting in the TSTransco incurring losses. After introduction of the open access system, Transco is losing HT consumers resulting in revenue loss. So far, TSTransco lost sales of about 1,000 MW, equivalent to about Rs 700 crore. Earlier, consumers had no option but to purchase power from the electricity board, but the open access system allows major consumers of power, with a connected load of 1 MW and above, to buy power at cheaper rates from the open market.

The idea of open access system is that customers should be able to choose from among a large number of competing power companies, instead of being forced to buy electricity from an existing power company. The cost of power supplied by TSTransco is around `5 per unit, including cross subsidy. In the open market, it is available at `3 to `4 per unit, and sometimes at `2 per unit.

A major chunk of TSTransco’s revenue comes from HT consumers. By losing HT sales, TSTransco is also losing huge revenue. Southern Power Distribution Company CMD G. Raghumareddy said that due to the open access system, about 1,000 MW is being purchased from the open market by its customers.

“Customers are approaching us only when the cost per unit climbs to over Rs 5,” Mr Reddy told this newspaper. However, consumers who purchase power from the open market have to pay wheeling, transmission and other charges to TSTransco. They can purchase power for the short term (for less than one month), medium term (3 months to 3 years) and long term (12 to 25 years).

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