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MSEDCL smirks as Gujarat bans open access

According to reports, MSEDCL, which has always been unfavourably compared with Gujarat power companies, is now feeling vindicated as the Gujarat government has banned state-based industries from sourcing power from outside. This will compel them to buy costlier power from government-run discoes.

MSEDCL has been reluctant to grant open access permissions as it feels that the tariff will shoot up if industries stop buying power from it.

Gujarat-based industries import close to 1,000MW from electricity exchanges of other states, while state-run utilities have almost 2,500MW of idle generation capacity. The state discoes have to pay close to Rs 8,000 crore annually as fixed or capacity charges to power producers since it is unable to buy as much power as it contracted.The decision has evoked howls of protest from Gujarat industrialists, who say that cost of power will increase by Rs 2.75 per unit. “Industries in Gujarat will have to pay close to Rs 7 per unit now. This is comparable to Maharashtra’s tariff,” a MSEDCL official told TOI.

The official also said that Gujarat wanted to reduce its solar power tariff, since it tied up for about 950MW capacity at a higher price, without inviting competitive bids as against the need for 350MW to meet its obligations to promote renewable energy. This decision had come under fire from AAP national leader Arvind Kejriwal some days ago.

Gujarat government’s move will help Maharashtra whenever it wants to buy power from exchanges. “Demand for power has gone down by at least a million units (MU) and is expected to fall further,” the officer said.

Of late MSEDCL has been getting relief from criticism due to developments in other states. Recently, Tamil Nadu Electricity Regulatory Commission (TNERC) had praised MSEDCL’s load shedding model and asked the generation company to form a committee to study it and devise a plan to reduce load shedding in Tamil Nadu.

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