New Electricity Rules Make Transmission Access Simpler

The Ministry of Power (MoP) has released the Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules 2021, which are aimed at allowing power sector utilities easier access to the electricity transmission network across the country.

Transmission system is the vital linkage in the power sector value chain connecting generation and demand. The new rules aim to ensure adequacy of transmission system for supply of power from one state to another state and across various regions. The seek to streamline the process of planning, development and recovery of investment in the transmission system and encourage investments in the generation and transmission sectors.

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, said MoP.

The rules underpin a system of transmission access which is termed as a General Network Access in the inter-state transmission system. “This provides flexibility to the States as well as the generating stations to acquire, hold and transfer transmission capacity as per their requirements. Thus, the rules will bring in rationality, responsibility and fairness in the process of transmission planning as well as its costs,” said the ministry.

In a major change from the present system of taking transmission access, power plants will not have to specify their target beneficiaries. The rules are also meant to 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 the roles of various agencies involved in the transmission planning process:

• The Central Electricity Authority will prepare a short-term plan every year on rolling basis for next 5 years and perspective plan every alternative year on rolling basis for next 10 years.
• The Central Transmission Utility will prepare an implementation plan for inter-State transmission system every year on 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 rules also outline the recovery of GNA charges from the users of transmission network and assign the responsibility of billing, collection and disbursement of inter state transmission charges to the Central Transmission Utility.

The ministry states that the rules have, for the first time, enabled transmission capacity to be sold, shared or purchased by the states and generators. The rules prescribe that excess drawal or injection over the GNA capacity sanctioned will be charged at rates which are at least 25% higher, aiming to ensure that entities do not under-declare their GNA capacity. The Central Electricity Regulatory Commission (CERC) has been tasked with bringing out detailed regulations on GNA in inter-state transmission system.

Recent related reforms notified by the ministry include the separation of the Central Transmission Utility from POWERGRID to provide transparency and a level playing field in the bids for transmission and reduced the lock-in period for transmission projects in order to attract investments and more competition. MoP also issued the Right of Consumer rules, aiming to empower consumers and rules as it laid down the ceiling for late payment surcharge.