New Electricity Rules Curb Arbitrary Hikes in Open Access Surcharge
The changes are expected to facilitate open access and bring certainty to consumers
January 3, 2023
The Ministry of Power has made changes to the Electricity Rules, 2005. According to the notification, the surcharge that open access consumers must pay, as determined by the state commissions, should not exceed 20% of the average cost of supply of power.
The power distribution companies (DISCOMs) often levy stiff open access surcharges on commercial and industrial (C&I) consumers to dissuade them from opting for other sources of power. The new rules are expected to curb DISCOMs’ tendency and allow competition between suppliers and private generating companies for the benefit of consumers.
The new rules apply to surcharges including both cross-subsidy and additional surcharges.
Further, the amendments said that the appropriate commission should within 90 days of publication of these rules, specify a price adjustment formula for recovery of the costs, on account of the variation in fuel prices, or power purchase costs. It added that the impact on the cost due to such variation should be automatically passed through in the consumer tariff, on a monthly basis.
If the distribution licensee fails to compute and charge the fuel and power purchase adjustment surcharge within the timeline, its right to recovery of costs on account of the fuel and power purchase adjustment surcharge will be forfeited.
Moreover, in such cases, the right to recovery of the fuel and power purchase adjustment surcharge determined during true-up will also be forfeited and the true-up of fuel and power purchase adjustment surcharge by the commission, for any financial year, will be completed by June 30 of the next financial year.
Resource Adequacy
The state commission should create regulations for resource adequacy based on the guidelines from the central government and the model regulations from the Forum of Regulators. The distribution licensees should develop a resource adequacy plan that follows these regulations and obtain approval from the commission.
The National Load Despatch Center and the Regional Load Dispatch Center should 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.
Energy storage systems
As per the amendments, an energy storage system (ESS) can be owned, leased, or operated by a generating company, transmission licensee, distribution licensee, system operator, or independent energy storage service provider. If an ESS is located with and operated by a generating station, transmission licensee, or distribution licensee, it will have the same legal status as its owner.
The developer or owner of the ESS will have the option to sell, lease, or rent out the energy storage space to a generation or transmission, or distribution utility, or to a load despatch center. The owner of the ESS may also use some or all of the energy storage space to purchase and store electricity for sale at a later time.
The independent energy storage system will be a delicensed activity at par with a generating company in accordance with the provisions of the Act. If the owner or developer or lessee or user seeks to operate the ESS as an independent energy storage system, it should be registered with the authority and the capacity of such ESS should be verified by the authority.
The new rules are expected to bring clarity to regulatory issues.
Development of hydropower
The authority concerned will rule on the approval of hydroelectric generation projects, as outlined in Section 8 of the Act, within 150 days of receiving a complete application.
Also, the authority will decide on the approval of off-the-river pumped storage projects within 90 days of receiving a complete application.
Recently, the Ministry of Power announced that it was considering changes in the tariff policy that would allow the state governments to provide subsidies to eligible categories of consumers directly into their bank accounts by way of direct benefit transfer. The ministry said that the intention behind the proposed move is to ensure that the cross-subsidy surcharge component of the tariff does not keep escalating over time to cover for the higher subsidies being provided to retail consumers.
Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.
Get the most relevant India solar and clean energy news.
RECENT POSTS
LATEST HEADLINES
Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules
Mar 24, 2023
Intra-State Sections of Evacuation Infrastructure for Renewables Delayed
Mar 24, 2023
EnBW Takes €2.4 Billion Final Investment Decision on Offshore Wind Project
Mar 24, 2023
India Missed 2022 Renewables Target as Rooftop Solar and Wind fell Short
Mar 24, 2023
Researchers Aim to Accelerate Delivery of Space-Based Solar Power to Earth
Mar 24, 2023
India added an impressive 2.5 GW open access solar capacity in 2022, registering a growth of 92% year-over-year (YoY), according to the 2022 Q4 & Annual Mercom India Solar Open Access Market Report. Karnataka emerged as the to...
March 23, 2023
Markets & Policy
Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar ModulesThe Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements betwe...
March 24, 2023
C&I
In Bengaluru, a 100 kW Solar System Can Save C&I Entities ₹1 Million AnnuallyMercom India successfully concluded the C&I Clean Energy Meet 2023 in Bengaluru, where stakeholders in the solar sector and commercial and industrial entities converged to enthusiastically discuss the benefits of renewable ene...
March 24, 2023
Other
Gensol Acquires Solar Tracker Maker Scorpius for ₹1.35 BillionGensol Engineering, a part of solar engineering, procurement, and construction (EPC) company Gensol Group, has acquired India-based solar tracker manufacturer Scorpius Trackers for ₹1.35 billion ($16.4 million). Gensol said the ac...
March 23, 2023
Trending News
Mercom Focus
Researchers Find Solution to Manage Load in Solar PV & Storage Systems
February 28, 2023
February 27, 2023
February 24, 2023
January 17, 2023
Magazine
Latest News
The Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements...
March 24, 2023
The Ministry of New and Renewable Energy (MNRE) told the Parliamentary Standing Committee on Energy that the intra-state stretches of the Green Energy Corridor (GEC) have been delayed due to various reasons, including...
March 24, 2023
German electric utility company Energie Baden-Wuerttemberg (EnBW) has made its final €2.4 billion (~$2.6 billion) investment decision on He Dreiht, a major wind project in the German North Sea. The project has a capacity of 960...
March 24, 2023
The Parliamentary Standing Committee on Energy report has isolated underwhelming progress on rooftop solar and wind energy projects as the primary reason for India falling short of achieving its renewable energy capacity target...
March 24, 2023
Researchers at Northumbria University are studying ways of producing wireless electricity from space to Earth by harvesting the Sun’s energy. U.S.-based aerospace, defense, and information security organization Lockheed Martin...
March 24, 2023
The Maharashtra Electricity Regulatory Commission (MERC) recently directed Hindustan Petroleum Corporation (HPCL) and the Maharashtra State Electricity Distribution Company (MSEDCL) to recompute the delayed payment charge from...
March 24, 2023
The National Renewable Energy Laboratory (NREL) has devised a new way to produce perovskite solar cells that could speed its commercialization. Different layers are typically added sequentially to a conductive glass substrate to...
March 24, 2023
Saudi Arabia-based energy company ACWA Power has signed power purchase and investment agreements with National Electric Grid of Uzbekistan, and the Ministry of Investment, Industry, and Trade to develop new solar and battery...
March 24, 2023
The China Securities Regulatory Commission has approved the registration of CSI Solar, the engineering, procurement, and construction arm of solar module maker Canadian Solar, to issue an initial public offering (IPO). The...
March 24, 2023
Renewable capacity grew by 9.6% in 2022, adding a record 295 GW worldwide. This accounts for 83% of all power capacity added last year and brings the global renewable generation capacity to 3,372 GW by the end of last year, a...
March 24, 2023
Get the most relevant India solar and clean energy news.
POPULAR POSTS
Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules
Mar 24, 2023
Intra-State Sections of Evacuation Infrastructure for Renewables Delayed
Mar 24, 2023
EnBW Takes €2.4 Billion Final Investment Decision on Offshore Wind Project
Mar 24, 2023
India Missed 2022 Renewables Target as Rooftop Solar and Wind fell Short
Mar 24, 2023
Researchers Aim to Accelerate Delivery of Space-Based Solar Power to Earth
Mar 24, 2023