The Ministry of Power has unveiled the Electricity (Amendment) Rules, 2024, ushering in a series of significant changes in the power sector. These rules have come into force from January 11, 2024. They introduce amendments to the existing Electricity Rules of 2005.
The amendment rules have inserted three new rules, numbered 21, 22 and 23. The prior rule 21 has been re-numbered as 24. These rules seek to address various aspects of power generation, transmission, and open access charges.
Rule 21: Establishment, operation, and maintenance of dedicated transmission lines
This rule exempts generating companies, entities setting up captive generating plants, Energy Storage Systems, or consumers with load requirements of at least twenty-five Megawatts (for Inter-State Transmission System) and ten Megawatts (for Intra-State Transmission System) from obtaining a license under the Electricity Act. However, compliance with regulations, technical standards, guidelines, and procedures issued under the Act is mandatory.
Rule 22: Open Access Charges
This rule outlines the calculation of wheeling charges, charges for using the network of State Transmission Utilities, and additional surcharges for Open Access Consumers. The formula for wheeling charges takes into account the annual revenue requirement towards wheeling divided by the energy wheeled during the year. The charges for using the State Transmission Utility network by consumers availing short-term open access shall not exceed one hundred ten percent of those levied on long-term or General Network Access users. The additional surcharge for Open Access Consumers is capped at the per-unit fixed cost of power purchase, with a linear reduction over four years from the date of grant.
Rule 23: Gap between approved Annual Revenue Requirement and estimated annual revenue
This rule ensures that tariffs are cost-reflective, minimizing any gap between the approved Annual Revenue Requirement and the estimated annual revenue from approved tariffs. Exceptions are made under natural calamity conditions, with any resulting gap not exceeding three percent of the approved Annual Revenue Requirement. Any such gap is to be liquidated in a maximum of three equal yearly installments, starting from the next financial year. For existing gaps at the time of the rules’ notification, a maximum of seven yearly installments is allowed.
These amendments aim to streamline the power sector, encourage investments, and enhance operational efficiency.