The Hindu : Karnataka News : `Power trading will need monitoring to check prices'

Online edition of India's National Newspaper
Wednesday, Sep 22, 2004

Karnataka

Karnataka

`Power trading will need monitoring to check prices'

By Our Staff Reporter

BANGALORE, SEPT. 21. If power trading is allowed in Karnataka, will high demand and low supply make consumers pay exorbitant prices for power? Should an agency monitor prices or should the market take care of itself?

These were the issues thrown up at a public hearing on regulations for power trading licences at the Karnataka Electricity Regulatory Commission (KERC) here today.

Mismatch

V. Madhu, Managing Director of Karnataka Power Transmission Corporation Ltd. (KPTCL), stressed that there was a mismatch between power demand and supply. "If buyers [power traders] and sellers [electricity supply companies] are allowed to charge their own rates, prices will shoot up. Till the market stabilises, the KERC should set a price ceiling," he said.

He wanted an availability-based tariff (ABT) regime for intra-State power transfer. If that was in place, consumers would also benefit. "We should install meters for all consumers so that they are charged more at peak hours and less during off-peak hours," he said. He also wanted load despatch centres set up for the existing electricity supply companies (escoms).

As KPTCL owned the State's power transmission network, it would have to open up the system to traders. "But we cannot allow everyone to trade power at the same time because of system constraints. We need 24-hour advance notice of how much power the traders plan to sell at one time."

Mr. Madhu wanted the KERC to resolve disputes that might arise between traders and buyers. "The mechanism now is too time-consuming. The KERC can initially settle these, but for that the Karnataka Electricity Reforms Act must be amended," he said.

Licences

Traders could be given long-term or short-term licences. If it was long-term, then power purchase agreements came into play. He also felt that traders should have sales tax registration so that the Government could monitor the trading.

As per the proposed rules for trade licences, prospective traders should be engineers and also establish their creditworthiness. B.G. Rudrappa, former Karnataka Electricity Board chairman, felt that this was unnecessary. Besides, traders should not be involved in system maintenance. That was the power generator's job.

Settlement mechanism

Vishnuvardhan Reddy, Director (Finance) of Karnataka Power Corporation Ltd. (KPCL), pointed out that the KERC would find it difficult to establish the creditworthiness of traders. He also felt that the commission should set up and regulate a payment settlement mechanism for power trading.

Representatives of the Indian Wind Power Association said the proposed regulations on power trading should ban generating companies from setting up trading companies. Non-conventional sources of power also had to be encouraged.

The Managing Director, Gulbarga Electricity Supply Company, Monappa, and the former Director (Technical), Bangalore Electricity Supply Company, Venkatasubba Rao, spoke.

Printer friendly page
Send this article to Friends by E-Mail

Karnataka