States cannot block access of power from grid, says Central Electricity Regulatory Commission

 Power sector regulator Central Electricity Regulatory Commission (CERC) today warned states including, Tamil Nadu and West Bengal, that investments in the sector could be hit if they continue to block electricity supply to the National Power Grid."States like Tamil Nadu, Kerala, Karnataka and West Bengal have blocked access to the grid under the Section 11 of the Electricity Act 2003. You (states) cannot do that...", CERC Chairman Pramod Deo told reporters here.

Certain states have blocked supply access to the grid, which runs against the spirit of Section 11 of the Electricity Act 2003, he said.

Some of the states had blocked access citing power shortage in their respective territories.

"In Karnataka, the High Court passed that order and we have challenged it in the Supreme Court. The Central Government had also joined in this.. Even Tamil Nadu under Sec 11 has blocked access and the reason given by the government is shortage," Deo, who was here to participate in All India Conference of Chairmen of Central and State Electricity Regulatory Commissions, said.

This kind of action by states would result in decreased investments, he said.

"If state governments have a contract or Power Purchase Agreements (PPA), they cannot break it. But if they do not have a contract, they can supply for anyone...," he said.

Deo also opined that each State should study availability of power. "You cannot say Chennai will get 24 hours power supply and a village outside Chennai will have it only for four hours. First you should study how much electricity is available".

He pointed out that it was the duty of the regulatory commission and distribution company to study the availability of power and said only Maharastra is currently following it.

On the Renewable Energy Certificate Regulation, he said it would be implemented by January 2011 and the new PPA signed later would adhere to it.

"If you had already signed a PPA, then they will still be governed by gross and returns. But those PPAs signed after January 2011 would follow the new norms," he said.

However, he clarified that the volume of REC that would come up for trading cannot be estimated.

In January 2010, CERC notified a regulation on Renewable Energy Certificate in fulfillment of its mandate to promote renewable energy sources and development of electricity market.

The framework of REC is expected to push renewable energy capacity addition in the country.