Electricity (Amendment) Rules, 2022 (Draft)

Aug 17, 2022 | by TeamLease RegTech Legal Research Team

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Industry Specific ComplianceThe Ministry of Power on August 12, 2022, issued Electricity (Amendment) Rules, 2022 to further amend the Electricity Rules, 2005. The ministry also seeks comments on the said draft on or before September 11, 2022. 

The following amendments have been made:

• After Rule 12 which specifies “Cognizance of the offence” the following provisions have been inserted, namely:

• Surcharge payable by Consumers seeking Open Access

It is stated that the surcharge determined by the State Commission shall not exceed 20% of the Average Cost of Supply. 

• Timely recovery of power purchase costs by Distribution Licensee:

It is stated that within 90 days of publication of these Rules, the Appropriate Commission specifies a price adjustment formula for recovery of the costs, arising on account of the variation in the price of fuel, or power purchase costs. Provided that till such formula is specified by the Appropriate Commission, the formula given in the methodology shall be applicable.

• Subsidy Accounting: 

Accounting of due subsidy shall be done by the distribution licensee, in accordance with the Standard Operating Procedure (SOP) issued by the Central Government. 

• Resource Adequacy:

A Guideline for assessment of Resource Adequacy during the generation planning stage (one year and beyond) as well as during the operational planning stage (up to one year) shall be issued by the Central Government in consultation with the Authority, within 6 months from the date of notification of these Rules. 

The State Commission shall frame regulations on Resource Adequacy, in accordance with the Guidelines issued by the Central Government. 

The state Commission shall review the Resource Adequacy every 6 months for each distribution licensees and if there is any non-compliance, charges for failure to comply may be specified by the state commission. 

The National Load Dispatch Centre (NLDC) and the Regional Load Dispatch Centres (RLDCs) shall 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.

The State Load Dispatch Centre (SLDC) shall carry out assessments of Resource Adequacy, for operational planning, at the state level, in consultation with the distribution licensees on an annual basis, in accordance with the Guidelines issued by the Central Government and the direction of the State Commission. Further, the SLDC shall review the operational resource adequacy on a daily, monthly, and quarterly basis.

• Development of Hydro Power: 

The Authority shall decide the cases for grant of concurrence to hydro- electric generation scheme, within 150 days from the date of submission of the scheme, complete in all respect, and for off-the river Pumped Storage Plant Scheme, within 90 days from the date of submission of the scheme, complete in all respect. 

• Energy Storage System:

The ESS shall be utilized either as a standalone system or as a grid element or network asset or as complementary with the generation, transmission, and distribution.

The ESS shall be accorded status based on its application area i.e. generation, transmission, and distribution.

The ESS can be developed, owned, leased and/or operated by a generating company or a transmission licensee or a distribution licensee or a system operator or a standalone energy storage service 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/owner of the ESS shall have an option to sell/lease/ 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.

The standalone ESS shall be a delicensed activity at par with a generating company.

• Implementation of Uniform RE Tariff for Central Pool:

There shall be a different Central Pool for each of the sectors like Solar, Wind, Hybrid, Hydro, Small Hydro Power, and Power from any other renewable energy resource including storage or their combination thereof as may be notified by an order by the Central Government.

The implementing Agency shall compute the Uniform Renewable energy tariff for selling of electricity to End Procurer(s) by Intermediary Procurer(s), on a monthly basis, as per the methodology given in Schedule-l of these Rules. The implementing Agency shall also issue the monthly account statements for adjustment of any surplus or deficit among the Intermediary Procurers. Intermediary Procurer(s) shall within 15 days make the payment as per the monthly account statements to the other intermediary procurer(s), if the payment is due to it.

The Contractual Obligations between Power Generators & Intermediary Procurer and Intermediary Procurer & End Procurer such as liquidated damages, penalties, extension charges, and dispute resolutions shall be governed by respective bidding documents including Power Purchase Agreements, Power Sale Agreements and will have no bearing on Uniform Renewable Energy Tariff.

The impact on the tariff due to change in Law shall be in accordance with the Bidding Documents and shall be reflected in the pooled tariff computed in accordance with these Rules.

Uniform Renewable Energy Tariff shall be applicable only to power procured by the End Procurers and shall not in any manner have any implication on the Renewable energy tariff discovered under the respective tariff based competitive bid process and payable to Renewable Energy Generators by Intermediary Procurer as per the Power Purchase Agreement.

The trading margin, as notified by the Appropriate Commission / Central Government shall be payable by the End Procurer to the Intermediary Procurer.

The Appropriate Commission, on an application made by the Intermediary Procurer(s) or End Procurers, as the case may be, shall adopt the tariff discovered through competitive bidding process carried out by Intermediary Procurers and as per provisions of Bidding Guidelines notified by the Government from time to time. 

The End Procurer(s) shall obtain the approval of the concerned State Commission for the procurement of the electricity from a pool at Uniform Renewable Energy Tariff computed under these Rules from time to time.

Bilateral scheduling from the Renewable energy generators shall be done directly to the end procurers as per the Power Supply Agreement.

The Scheduling, Accounting, Deviation Settlement Mechanism (DSM) shall be as per the extant regulation of the Appropriate Commission.

The Intermediary Procurer shall raise the bill on a monthly basis as per the Uniform Renewable Energy Tariff computed by the Implementing Agency for the relevant month and in accordance with the terms of the respective Power Sale Agreement.

The Implementing Agency shall make public the relevant details including the monthly accounts statements, on its website and shall have no liability except for computing Tariff on a monthly basis for the sale of power from the Central Pool as per these Rules and shall be kept indemnified.

These rules shall be applicable only to the Renewable Energy generators for their contracted capacity which forms part of the Central Pool. 

• Rule 10 which specifies “Appeal to the Appellate Tribunal” has been substituted, namely: 

It is stated that the Appropriate Commission, shall pass a final order, for resolution of dispute within 120 days from the date of receipt of the petition in the Commission, which may be extended by thirty days for reasons to be recorded in writing.

It is also stated that if the final order has not been passed by the appropriate Commission, within 90 days or 180 days, as the case may be, the affected party may approach the Appellate Tribunal for Electricity for appropriate relief.

[File No. 23/2/2022-R&R]


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