Nineteen states have issued open access regulations, setting the stage for power play that will give commercial consumers like hotels, restaurants, hospitals and small industries – consuming one mw and above- to pick and choose their utilities.

The states that have issued the regulations are Assam, Andhra Pradesh, Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Maharashtra, Orissa, Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttaranchal, West Bengal, Gujarat, Delhi and Kerela.

As part of the common carrier principle espoused in the Electricity (Amendment) Act, 2003, the new regime will enable consumers to buy power from a supplier of their choice, even if it is not present in the area.

This means that a consumer will be able to use the local utility’s distribution network to wheel electricity from another supplier.

Consumers will, however, have to pay wheeling charges and a surcharge that will compensate the local operator for loss of a customer but will leave enough incentive for switching to the new supplier. The method of calculating the surcharge and the implementation of the regime are expected to vary due to lack of unanimity among the state power regulators. Tamil Nadu, Chhattisgarh, Rajasthan and Haryana, for example, will follow the embedded cost method for calculating the surcharge. Madhya Pradesh, Himachal Pradesh, Gujarat, Uttaranchal and West Bengal will follow the avoided cost method, the difference in applicable tarriff and the cost of supply to the consumer seeking open access is taken into account. In the avoided cost method, the cost of supply is calculated on the basis of 5% power purchased at the margin.

The implementation will also vary according to states. Tamil Nadu will implement the regime in three stages, starting with consumers of 10 mw or more and expanding it to include those who use one mw or more by December 2008. Madhya Pradesh will also start with 10 mw consumers and include one mw users by October 2007. Karnataka and Rajasthan will initiate the process with the 15 mw threshold and will include the one mw band latest by April 2008. Gujarat will start with the five mw band from January 2006 after the implementation of intra-state availability-based tariff and will bring in consumers of one mw under the open access fold in the next years.