Ministry of Power Notifies Electricity (Amendment) Rules, 2024

With a view to accelerate energy transition, the Ministry of Power has notified the Electricity (Amendment) Rules, 2024.

A few changes have been made to the draft amendment rules released back in June 2023. For instance, the proposal to address frivolous litigations, by mandating upfront part payment of dues before filing an appeal, has been abandoned.

Certain entities are exempted from the requirement of obtaining a license to establish, operate, or maintain a dedicated transmission line to connect to the grid. Rule 21 prescribes that such a license need not be obtained by generating companies, persons setting up a captive generating plant/ an Energy Storage System (ESS), or consumers having a load of not less than 25 megawatts in case of inter-state transmission system and 10 megawatts in case of intra-state transmission system. The same is subject to compliance with the regulations, technical standards, guidelines, and procedures issued under the provisions of the Electricity Act, 2003. This provision is expected to promote ease of doing business and generate employment opportunities.

In light of high open access charges levied by certain state regulators, it was considered necessary to rationalise the charges. Accordingly, the amendment rules provide for the manner in which open access charges such as wheeling charges, state transmission charges and additional surcharges have to be determined, under Rule 22.

The press release dated January 15, 2024, refers to the negative impact of huge revenue gaps on distribution companies on account of the disallowance of costs incurred. Rule 23 seeks to remedy this issue by mandating that there should be no gap between the approved Annual Revenue Requirement and the estimated annual revenue from the approved tariff, except in extraordinary circumstances such as natural calamities.

The Minister for Power and New & Renewable Energy, R K Singh expressed that the amendment rules will bring down the losses of distribution companies. He added that the removal of the license requirement and rationalisation of open access charges will facilitate the adoption of renewable energy.