MoP issues draft Electricity (Amendment) Rules, 2022

The Ministry of Power (MoP) has issued the draft Electricity (Amendment) Rules, 2022.

The MoP has suggested creating a central pool of renewable energy sources from which an intermediary company will procure power to be supplied to an entity that will undertake distribution and retail supply to more than one state. The ministry has also proposed that standalone energy storage system (ESS) will be a delicensed activity. The ministry has sought stakeholders’ comments by September 11, 2022.

  • Central pool: Central pool means pool of category specific power from inter-state transmission system (ISTS) connected renewable energy sources including hydro, wind, solar, biomass, biofuel, bio-gas, etc being procured by the authorised intermediary procurers under Section 63 of the (Electricity) Act and as per provisions of bidding guidelines notified by the central government, from time to time for supply to the end procurers of more than one state so that such power from renewable energy sources can be supplied to all end procurers from the concerned pool at uniform tariff under the rules.
  • Surcharge payable by consumers seeking open access: The surcharge shall not exceed 20 per cent of the average cost of supply.
  • Timely recovery of power purchase costs by distribution licensee: The draft rules propose that the appropriate commission shall within 90 days of publication of these rules, specify a price adjustment formula for recovery of costs, arising on account of the variation in the price of fuel, or power purchase costs. The impact in the cost due to such variation shall be automatically passed through in the consumer tariff, on a monthly basis, using this formula. Such monthly automatic adjustment shall be trued up on an annual basis by the appropriate commission.
  • Subsidy accounting: Besides, accounting of the due subsidy shall be done by the discom in accordance with the standard operating procedure (SOP) issued by the central government.
  • Resource adequacy: The National Load Dispatch Centre (NLDC) and Regional Load Dispatch Centres (RLDCs) will carry out assessments of resource adequacy, for operational planning, at the national and regional levels, respectively, on an annual basis, in accordance with the guidelines issued by the central government.
  • Development of hydropower: The authority shall decide the cases for grant of concurrence to hydroelectric generation scheme within 150 days from the date of submission of the scheme. Further, the authority shall decide the cases for grant of concurrence to off-the river pumped storage plant scheme within 90 days from the date of submission of the scheme.
  • ESS: Another key proposal under the draft rules is the delicensing of standalone ESS, which will be considered as a part of the power system. The ESS will be accorded status based on its application area — generation, transmission and distribution. The ESS can be developed, owned, leased and/ or operated by a genco or a transmission licensee or a discom or a system operator or a standalone ESS provider. When an ESS is owned and operated by and co-located with a generating station or a transmission licensee or a distribution licensee, it shall have the same legal status as that of the owner. The developer of the ESS shall have an option to sell or lease or rent out the storage space in whole or in part to any utility engaged in generation or transmission or distribution; or to a Load Despatch Centre.
  • Implementation of uniform renewable energy tariffs for central pool: Uniform tariffs will be computed on a monthly basis by an implementing agency for each category in the central pool (for instance, solar power central pool, wind power central pool, etc). The intermediary procurer will sell power from renewable energy sources to all end procurers at pre-decided tariffs. The implementing agency will be a central agency, notified by the centre, from time to time for implementation of ‘uniform renewable energy tariff for central pool’ under the said rules.

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