Draft Electricity (Amendment) Rules, 2023
- The Ministry of Power, Government of India (MOP) on April 20, 2023 notified the Draft Electricity (Amendment) Rules, 2023 (Amendment Rules).
- MOP has incorporated provisions of ‘Subsidy Accounting & Payment' and ‘Framework for Financial Sustainability' (prior to the amendment, no specific framework for financial sustainability was present in the Rules).
- The amendment substitutes Rule 15 of Electricity Rules, 2005,
inserts Rule 20 and re-numbers existing rule 20 to 21. The
substitution and insertions made in Rule 15 and 20 are provided
- The amendment has substituted Rule 15 of Electricity Rules,
2005 to add sub-Rules 2, 3 and 4.
- Sub-Rule 2 provides for a quarterly report to be issued by the State Commission for each Distribution Licensee regarding findings on the accuracy of subsidy demand raised by Distribution Licensee based on account of energy consumed by the subsidized category, consumer category wise per unit subsidy declared by State Government, the actual payment of subsidy in accordance with Section 65 of the Act and the gap in subsidy due and paid along with other relevant details.
- Sub-Rule 3 provides the deadline for submission of quarterly report within 45 days from end of respective quarter.
- Sub-Rule 4 provides for consequences of non-compliance in the form of appropriate action by the Commission.
- Prior to the amendment, Rule 15 was silent on the procedure and was merely referring to Standard Operating Procedure issued by Central Government in this regard.
- The Amendment has inserted Rule 20 and re-numbered earlier Rule
20 as 21, thus introducing the Framework for Financial
- The amendment provides for a loss reduction trajectory to be adopted by the State Commission in accordance with trajectory agreed by the respective State governments and approved by the Central government.
- All prudent costs incurred by the Distribution Licensee for supply of electricity and for meeting requirement of Resource Adequacy plan under Electricity (Amendment) Rules, 2022 shall be taken into consideration while determining the loss reduction trajectory.
- The prudent costs incurred for asset creation to maintain and develop the distribution system, according to Clause (d), shall be pass-through subject to fulfilment of conditions under the proviso.
- The losses accrued due to deviation from AT&C loss reduction trajectory shall be shared between the Distribution Licensee and consumers. Two third of the profit must be passed on to consumers and one third can be retained by the Distribution Licensee. Further, half of the losses shall be borne by the Licensee and half shall be passed on to the consumers in tariff.
- The amendment in this rule also provides under Clause (g) for Return on Equity (RoE) to be permitted by the states.
- The amendment has substituted Rule 15 of Electricity Rules, 2005 to add sub-Rules 2, 3 and 4.
Scheme for pooling of tariff of thermal power plants whose PPAs have expired
- The Ministry of Power (MoP) has notified the Scheme for Pooling of Tariff of those plants whose PPAs have expired. The scheme's goal is to use the power-generating capacity of thermal power plants older than 25 years old whose PPAs have ended but are still in good condition for operation.
- According to the government, the strategy might lessen the creation of new long-term PPAs and eliminate the need for substantial investments to build up these power plants.
- As per the Scheme, the government has mandated creating a central sector Genco-wise common pool of thermal power generating stations (coal and gas-based) where their PPAs had already expired. It also proposed that any Genco competing with their PPAs should be automatically added to this pool.
- The scheme also includes the development of a single-window system. Within 15 days of the creation of the common pool, the states or DISCOMs may submit their willingness for power allocation through the window. The plan also stipulates a five-year minimum requisition time for authority obtained via the common pool. Power distribution from the common pool to the states and DISCOMs will be based on new PPAs with the pool and the Gencos under the new system.
- The rules of the scheme recommend that the total capacity of the pool be calculated by adding the charging capacities of each station in the pool in accordance with the Central Electricity Regulatory Commission's (CERC) tariff regulations. A uniform capacity fee based on the overall capacity charge and percentage allocation of electricity from the common pool will be billed to the states and DISCOMs under this.
- The scheme addresses a number of additional issues, Inter alia, the implementation of meritorder dispatch, the bundling of renewable energy, and the distribution of benefits and roles and duties among stakeholders.
DERC (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation) (First Amendment) Regulations, 2023
- The Delhi Electricity Regulatory Commission
(DERC) notified that the Delhi Electricity
Regulatory Commission Renewable Purchase Obligation and Renewable
Energy Certificate Framework Implementation) (First Amendment)
Regulations, 2023 will be applicable from April 01, 2023 onwards.
By way of the said Amendment, the following changes have been
- The definition of ‘Consumption' has been amended
- In case of Distribution Licensees, % of total sale of power to its retail consumers in its area of supply
- In case of Open Access Consumers, the total energy recorded by the meter for the whole year
- The Renewable Purchase Obligation (RPO) in India requires meeting wind and hydro power targets for energy consumption, with specific timelines for commissioning projects and thresholds for excess energy utilization.
- Any shortfall in the RPO can be compensated by excess energy consumed from eligible projects, and Renewable Energy Certificates can be used to calculate the remaining shortfall. Importation of hydro power from outside India is not considered for meeting targets.
- This amendment provides for certification of purchase of electricity from renewable energy sources in excess of RPO for all eligible entities and computation of quantum of RPO compliance & excess renewable purchase for non-obligated and obligated entities.
- Prior to the amendment the value of BG/FDR and the weighted average price of renewable energy certificate at Power Exchange (IEX) for the past relevant year, now the existing provision has amended the provision to the past 3 months.
- The amendment brought in a change in provision where the REC cost was to be considered as per Central Electricity Regulatory Commission (Terms and Conditions for Renewable
- Energy Certificates for Renewable Energy Generation) Regulations, 2022 as amended from time to time and shall be trued-up.
- Prior to this the REC cost was to be calculated at Floor Price, if the floor price was zero the REC was to be calculate at an average of floor price and Forbearance price as determined by CERC, for such shortfall of units which shall be trued up subsequently.
- Earlier the penalty for non-compliance of RPO was calculated based on 10% of the weighted average Floor Price of Solar and Non- Solar Renewable Energy Certificate. The same has now been amended so that the penalty is calculated at the rate of 10% of weighted average REC price discovered at IEX for the relevant year, for quantum of shortfall in RPO.
- The definition of ‘Consumption' has been amended to:
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