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Power Ministry promulgates new rules to promote ease of doing business in power sector

The Central Government has notified these rules with a view to streamlining the process of planning, development and recovery of investment in the transmission system.

SNS | New Delhi |

The Power Ministry on Sunday promulgated the new Electricity Rules 2021 that would pave the way for overhauling of transmission system planning, towards giving power sector utilities easier access to the electricity transmission network across the country.

The Central Government has notified these rules with a view to streamlining the process of planning, development and recovery of investment in the transmission system. The rules are aimed at encouraging investments in the generation and transmission sectors. The rules will enable the country to develop deeper markets, said a senior officer of the Power Ministry here on Sunday.

At present, generating companies apply for long-term access (LTA) based on their supply tie-ups, while medium-term and short-term transmission access is acquired within the available margins. Based on LTA application, incremental transmission capacity is added. A number of sector developments, such as the increasing focus on renewable energy, and the development of the market mechanism, necessitated a review of the existing transmission planning framework based on LTA.

The new rules underpin a system of transmission access which is termed as a General Network Access (GNA) in the inter-state transmission system, said a senior officer of the Power Ministry. The GNA would provide flexibility to the States as well as the generating stations to acquire, hold and transfer transmission capacity as per their requirements.

The rules would bring in rationality, responsibility and fairness in the process of transmission planning as well as its costs. “In a major change from the present system of taking transmission access, power plants will not have to specify their target beneficiaries,” the Power Ministry said.

The rules would also empower state power distribution and transmission companies to determine their transmission requirements and build them. Also, states will be able to purchase electricity from short term and medium-term contracts and optimize their power purchase costs.

Apart from introducing GNA, the rules also specify clear roles of various agencies involved in the transmission planning process. The Central Electricity Authority shall prepare a short-term plan every year on rolling basis for next 5 years and prospective plan every alternative year on rolling basis for next 10 years, the Ministry stated.

The Central Transmission Utility would prepare an implementation plan for inter-State transmission system every year on a rolling basis for up to next 5 years which will take into account aspects such as right–of–way and progress of the generation and demand in various parts of the country. The rules specify how the existing LTA would be transitioned into General Network Access, the Ministry stated.

The rules also outline the recovery of GNA charges from the users of the transmission network and assign the responsibility of billing, collection and disbursement of interstate transmission charges to the Central Transmission Utility.

The rules have enabled, for the first time, that the transmission capacity can be sold, shared or purchased by the States and generators. The rules prescribe that excess drawal or injection over the GNA capacity sanctioned shall be charged at rates that are at least 25% higher and this will ensure that the entities do not under-declare their GNA capacity. The Central Electricity Regulatory Commission (CERC) has been empowered to bring out detailed regulations on GNA in interstate transmission systems.