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Updated: December 10, 2009 16:04 IST

Open access system key to investments in power sector: CERC Chairman

Staff Reporter
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Pramod Deo, Chairman of Central Electricity Regulatory Commission (CERC).
Photo: S. James
The Hindu Pramod Deo, Chairman of Central Electricity Regulatory Commission (CERC). Photo: S. James

Open access in the power transmission and distribution system is vital for wooing private investments in the sector, according to Pramod Deo, Chairman of the Central Electricity Regulatory Commission (CERC).

Under this concept, private power producers can cater to their client companies by paying necessary charges for the utilities concerned. Open access was vital for establishing merchant power plants (MPP) that needed large capital.

“Huge investments are made in the projects, knowing they can sell the power in the market at attractive rates,” Dr. Deo told The Hindu in Madurai on Tuesday.

At a disadvantage

Without open access, promoters of the MPPs would have to sell only to the State Electricity Boards (SEB).

As many of the Boards were in bad financial health owing to their inability to raise tariffs, the MPPs stood to lose money.

On Tuesday, Electricity Minister Arcot N. Veeraswami had said that he expected five such plants of 10,000 MW capacity to be commissioned by 2012.

On the restructuring of SEBs, Dr. Deo, who was here to participate in the eighth conference of the Southern Electricity Regulators’ Forum, said it was vital for the transmission company to be independent of the distribution and generation companies.

The Electricity Act had provided for the transmission entities to be in government hands for many years, ruling out the question of privatising them in the near future.

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