Open access allows large users of power (Typically having connected load of minimum 500kw and above) to buy cheaper power from the open market.
The idea is that the customers should be able to choose among a large number of competing power companies, instead of being forced to buy electricity from their existing electric utility.
Open access can be categorized as inter-state and intra-state and further they can be categorized as short term ( < 1 month ), medium term ( 3 month-3 years ) and long-term (12 years- 25 years).
The open access system enables any power producer to sell power to any user across the country through the national grid, by bearing costs of transmission and distribution losses as well as wheeling and banking charges.
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