MoP Amends Electricity Rules, Provides Clarity on Open Access Surcharge and ESS


The Ministry of Power made some changes to the 2005 Electricity Rules. They shall come into force on the date of their publication in the Official Gazette.


Open Access Charges:


The notification states that the surcharge open access consumers will have to pay, should not exceed 20% of average power supply cost.


These new rules will curb DISCOMs tendency to impose stiff open access surcharges on C&I consumers. They will also allow for competition between suppliers and private generating firms for consumers’ benefit.


It further stated that the appropriate commission must, within 90 days after publication of these rules specify a price adjustment formula to recover the costs due to variation in fuel prices or power purchase cost. The consumer tariff should reflect the monthly impact of such variations on cost.

The distribution licensee will lose its right to recover costs incurred due to the fuel purchase adjustment surcharge and the fuel calculation surcharge if it fails to charge them within the timeframe.

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It is unclear if the new rules will apply to all components of open access surcharges that include additional surcharges and cross-subsidy charges, as well as transmission fees.

Resource Adequacy

The guidelines of the central government and model regulations from Forum of Regulators should be used by the state commission to create regulations on resource adequacy.

Distributor licensees must develop a plan for resource adequacy that conforms to these regulations, and get approval from the commission.

According to the guidelines of the central government, the National Load Despatch Center (NLDC) and the Regional Load Dispatch Center (RLDC) should conduct annual assessments of resource adequacy in order to plan at the national or regional level.

The State Load Despatch Centre shall review the operational resource adequacy on a daily, monthly andquarterly basis.

Energy Storage System:

The amendment stated that The Energy Storage System may be developed, leased, owned or operated by a generator company, a transmission licencee, a distributor licensee, or a system operator, or an independent energy storage provider. An Energy Storage System that is co-located or owned by a generating station, transmission licensee, or distribution licensee will have the same legal status.

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However, if the Energy Storage System is not owned or operated by the distribution licensee or generating station, its legal status will remain that of the owner. However, it will be treated as a separate storage element for scheduling dispatch and scheduling.

Developers or owners of Energy Storage Systems have the option to lease, rent or sell the storage space to any utility involved in generation, transmission or distribution.

The owner of the Energy Storage System can use part or all of the storage space to store and buy electricity or sell it later.

View the official document here:

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