Govt releases biz-friendly power regulations

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New Delhi: New rules have been prescribed to make doing business easier for companies such as green hydrogen makers, as well as to support energy transition and energy security by accelerating the creation of energy storage capacity.

Briefing media persons today, Power Minister R. K. Singh said consumers with more than a certain amount of load, as well as Energy Storage Systems (ESS), can now create, operate, and maintain dedicated transmission lines without obtaining a license.

Allowing such a facility would create a new category of bulk users in the country, benefiting from lower electricity costs and improved system stability. This facility was already open to generating businesses and captive generating stations.

The new rule allows generating companies, captive generating plants, energy storage systems, and consumers with a load of 25–30 megawatts to establish, operate, or maintain a dedicated transmission line without obtaining a license, provided they comply with the Act’s regulations.

The Electricity Act of 2003, which aims to provide open access to power, has been criticized for high charges imposed by state regulators, leading to the implementation of new rules and methodologies for calculating charges.

The rule, among other things, states that for a person who obtains General Network Access or Open Access, the additional premium must be linearly lowered and removed within four years of the date of grant. It is also stated that the additional price will apply solely to open-access users who are or have been customers of the relevant distribution licensee. Thus, a person who has never used the distribution licensee’s services would not be required to pay an additional cost.

The rule mandates that an additional premium for General Network Access or Open Access users must be lowered and removed within four years of grant, only applicable to existing users of the relevant distribution licensee.

Tariffs must reflect costs, but state authorities created an income gap, straining distribution corporations. To prevent this, formal restrictions were implemented, and revenue shortfalls must be closed promptly. New rules are in place to prevent revenue gaps, except in unusual circumstances.

The rule mandates cost-reflective tariffs, ensuring no difference between approved revenue requirements and expected income, except in natural disaster situations, and no gap exceeding three percent.

The rule also mandates liquidating a gap in late payment surcharge and carrying costs in three equal yearly instalments starting the next fiscal year.

Releasing the rules, the union Power Minister, R. K. Singh, stated that the steps taken by the government had already brought down the losses of the distribution companies from 27% in 2014 to 15.41% in 2022–23. These rules will ensure that their losses are further reduced and their viability increases, leading to their being able to provide better services to consumers.

The removal of the requirement for a license for specialized transmission lines for industry will make it easier to do business, resulting in faster industrial expansion and greater job creation, according to the minister. This, together with the streamlining of open access prices, will result in speedier adoption of

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