The Central Government, in the exercise of its powers under Section 176 of the Electricity Act, 2003, has introduced amendments to the Electricity Rules, 2005, with the issuance of the Electricity (Amendment) Rules, 2024. The new rules are set to come into force upon their publication in the Official Gazette.
The amendment focuses on various aspects related to the establishment, operation, and maintenance of dedicated transmission lines. Rule 21 of the existing Electricity Rules, 2005, will be renumbered as Rule 24, with the introduction of new rules preceding it.
One significant change pertains to the licensing requirements for entities involved in the generation of electricity, setting up captive plants, Energy Storage Systems, or consumers with a load of at least 25 MW for Inter-State Transmission System and 10 MW for Intra-State Transmission System. According to the amendment, these entities will not need a license under the Electricity Act for establishing, operating, or maintaining a dedicated transmission line connecting to the grid, provided they adhere to the relevant regulations, technical standards, guidelines, and procedures.
Another crucial aspect covered by the amendment addresses the charges for utilizing the State Transmission Utility network by consumers availing short-term open access or Temporary General Network Access (Temporary-GNA). The amendment stipulates that such charges should not exceed one hundred ten percent of the charges levied on consumers using the State Transmission Utility network on a long-term or General Network Access basis. It also introduces limitations on the additional surcharge imposed on Open Access Consumers, ensuring it does not surpass the per-unit fixed cost of power purchase by the relevant distribution licensee.
The provision includes specific conditions for the reduction of the additional surcharge for those availing General Network Access or Open Access, linearly decreasing over four years from the date of grant. Notably, the surcharge won’t apply for Open Access Consumers to the extent of maintaining their contract demand with the distribution licensees.
The amendment further defines General Network Access and Temporary-GNA in alignment with the Central Electricity Regulatory Commission (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022.
On the tariff front, the amendment emphasizes the need for cost-reflective pricing, ensuring there is no gap between the approved Annual Revenue Requirement and the estimated annual revenue from the approved tariff. In cases of natural calamities leading to a gap, the amendment outlines specific conditions for its management, restricting the gap to three percent of the approved Annual Revenue Requirement and stipulating a liquidation plan over a maximum of three equal yearly installments from the next financial year.
Additionally, for any existing gaps between the approved Annual Revenue Requirement and estimated annual revenue from the approved tariff as of the date of the rules’ notification, the amendment allows for liquidation over a maximum of seven equal yearly installments, starting from the next financial year. The carrying costs are to be calculated at the base rate of the Late Payment Surcharge, as specified in the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022. In essence, these amendments aim to streamline and regulate various aspects of the electricity sector, ensuring a more efficient and transparent framework for the establishment and operation of dedicated transmission lines and addressing issues related to tariffs and surcharges.