The Ministry of Power has amended Electricity Rules to allow entities commissioning captive power projects or energy storage systems or a consumer, with a load of at least 25 MW for interstate transmission systems or 10 MW for intra-state transmission systems to be exempted from obtaining a license to establish, operate, or maintain a dedicated transmission line to connect to the grid.

However, this exemption is contingent upon the company, individual, or consumer adhering to the regulations, technical standards, guidelines, and procedures specified under the provisions of the Act.

The Ministry had first proposed the changes to the Electricity Rules in June 2023, seeking stakeholder comments.

The amendments are called Electricity (Amendment) Rules, 2024, and will be effective from January 10, 2024.

The Ministry also introduced other amendments simplifying the open access charges calculations and tariff approval process to reduce the gap between annual revenue requirement and estimated annual revenue.

Wheeling Charges

The wheeling charges for open access consumers will be calculated by dividing the sum of annual revenue requirement towards wheeling by the energy wheeled during the year.

Charges for using the STU network

The charges for using state transmission utility networks by the consumers availing short-term open access or Temporary- General Network Access (T-GNA), as the case may be, will not be more than 110% of the charges levied on consumers using state transmission utility networks on a long-term basis or GNA basis.

Additional Surcharge

The amendment clarified that an additional surcharge imposed on any open access consumer cannot exceed the distribution licensee’s per-unit fixed cost of power purchase.

If a person opts for GNA or open access, the surcharge will gradually decrease over the four years following the grant of access.

However, the surcharge does not apply to the extent that the open access consumer maintains their contract demand with the distribution licensee. Importantly, the surcharge is only applicable to open access consumers who are or have been consumers of the relevant distribution licensee.

Tariff Approval

The approved tariff should accurately reflect costs, ensuring that there is no substantial gap between the approved annual revenue requirement and the estimated annual revenue from the approved tariff, except in cases of natural calamities. If any such gap occurs, it should not exceed three percent of the approved annual revenue requirement.

In the event of such a gap, it, along with carrying costs at the base rate of late payment surcharge specified in the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, as amended, must be settled in a maximum of three equal yearly installments starting from the next financial year.

Moreover, any existing gap between the approved annual revenue requirement and estimated annual revenue from the approved tariff on the date of these rules, along with carrying costs at the base rate of late payment surcharge, must be resolved in a maximum of seven equal yearly installments starting from the next financial year.

The Ministry had earlier amended the Electricity Rules reverting to the previous regulation, which allowed collective captive users to hold the minimum ownership of 26% in a group captive open access project.

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