Centre, states tussle over a centralised market for electricity

A FRESH slugfest between the Centre and states is brewing in the country’s power sector, the trigger being a plan by the Union government to jettison the existing decentralised, voluntary pool-based electricity market in favour of a radically different mandatory pool model on a pan-India basis.

Called the Market-Based Economic Dispatch (MBED) mechanism, the Union Ministry of Power proposal envisages centralised scheduling for dispatching the entire annual electricity consumption of around 1,400 billion units. This will mark a clear shift from a decentralised model followed now, which has been buttressed by the Electricity Act 2003 and follow-on reforms.