Power Ministry Notifies Electricity Rules 2021 for Ease of Doing Business in Power Sector

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The Union Ministry of Power has promulgated the Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules 2021. 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.


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 rules underpin a system of transmission access which is termed as a General Network Access (GNA) 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.

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In a change from the present system of taking transmission access, power plants will not have to specify their target beneficiaries. The rules will 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, stated the Ministry.

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 brought out by the Central government underpin that “electricity transmission planning shall be made in such way that the lack of availability of the transmission system does not act as a brake on the growth of different regions and the transmission system shall, as far as possible, to be planned and developed matching with growth of generation and load and while doing the planning, care shall be taken that there is no wasteful investment.”

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In a series of other reforms carried out earlier, also on the directions of the Union Power Minister RK Singh, the ministry had separated 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. The Ministry of Power also issued the Right of Consumer rules, which empower consumers and rules laying down the ceiling for late payment surcharge.

The rules specify how the existing LTA would be transitioned into GNA and 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.

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