West Bengal Proposes New Regulations to Determine Power Tariffs

Stakeholders can submit their suggestions and comments by July 12, 2023


The West Bengal Electricity Regulatory Commission (WBERC) has proposed rules encompassing various provisions relating to the determination of tariffs in the state.

The WBERC (Modalities of Tariff Determination) Regulations, 2023, intends to provide a transparent and structured framework for the state’s power generation, transmission, and distribution, ensuring fair and efficient consumer electricity pricing.

Stakeholders can submit their suggestions and comments by July 12, 2023.

For power generated from renewable energy sources below the minimum capacity required for competitive bidding under Section 63 of the Act, the Commission may specify ceiling tariffs.

Tariffs for hydroelectric projects, including pumped storage projects, can be determined under the regulated tariff mechanism (RTM) framework under section 62 for power to be sold to any distribution licensee through long-term power purchase agreements (PPA). However, specific conditions need to be met, such as firming up a long-term PPA for 60% or more of the total saleable energy with distribution licensees, obtaining approval from the Commission, and following the two-stage investment approval mechanism specified in the tariff regulations.

Under the new regulations, existing power-generating projects that operate under the RTM will continue to be covered under this framework. Tariffs for these projects will be determined under Section 62 of the Electricity Act for the remaining PPA period or the life of the project, whichever is earlier.

Expansion of state-owned and controlled power-generating projects will also be allowed under Section 62, with tariffs determined based on norms specified in the tariff regulations.

Private developers undertaking capacity expansions will have their tariffs determined through the RTM framework, limited to a one-time additional capacity not exceeding 100% of the approved capacity under their existing PPA with the distribution licensees. In such cases, the benefits of sharing infrastructure and utilizing new technology efficiently will be passed on to consumers through the tariff.

For power procurement not covered under the above regulations, tariffs will be determined through a competitive bidding process, subject to prior approval from the Commission and compliance with the guidelines issued by the central government under Section 63 of the Act.

Transmission Tariffs

The state transmission utility (STU) will prepare an updated five-year transmission system plan for the state annually for transmission tariffs, following the provisions of the state grid code read with the Electricity Grid Code and other guidelines/regulations.

All intra-state transmission projects must align with the approved state transmission plan, except for urgent works required for network strengthening or augmentation for safe, secure, and reliable grid operation, certified by the state load dispatch center.

New intra-state transmission projects above ₹2.5 billion (~$30.5 million), included in the STU transmission plan, will be implemented through tariff-based competitive bidding (TBCB) as per the guidelines issued under Section 63 of the Act. The Commission will adopt the tariffs discovered through this process. The STU will act as the bid-process coordinator until the state government notifies a separate body.

Tariffs for other intra-state transmission projects not covered under the TBCB framework will be determined under the RTM framework under Section 62 of the Act.

The determination of retail tariffs for consumers will follow the provisions of Section 62 of the Electricity Act 2003 and the tariff regulations.

The Commission can relax or amend any provisions of these regulations based on its judgment or in response to applications filed by affected parties. Additionally, if any difficulties arise in implementing the regulations, the Commission may issue directions to address them effectively, in line with the objectives of the regulations, the Act, and the rules.

In December, the Commission directed the state load dispatch center to follow certain provisions of the Central Electricity Regulatory Commission’s deviation settlement mechanism rules enacted this year until the state Commission notifies its updated regulations.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.