PowerMin issues electricity rules, eases open access and transmission

The rules now allows consumers which have specified energy load and Energy Storage Systems (ESS) to establish, operate and maintain their dedicated transmission lines themselves without licence

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The Union Ministry of Power issued Electricity (amendment) Rules, 2024, under the aegis of the Electricity Act, 2003 on Monday, aiming at reducing the hassles of electricity supply for large corporate and green energy sectors. 

The rules now allow consumers which have specified energy load and Energy Storage Systems (ESS) to establish, operate and maintain their dedicated transmission lines themselves without the requirement of licence. The rule covers those companies/person who have load more than 25 megawatt and 10 megawatt on inter-state and intra-state transmission network. 

“By allowing such a facility, a new category of bulk consumers would emerge, benefiting from more affordable electricity and enhanced grid reliability. This facility was already available to generating companies and captive generating station,” said the union power ministry. 

The rules were issued through a gazette notification. It has also addressed the issue of high open access charges faced by large electricity consumers. It has stipulated new formula to reduce open access charges. It also prescribed, a person availing General Network Access (GNA) or Open Access, the additional surcharge shall be linearly reduced and get eliminated within four years from the date of grant of access. 

Open access charges are levied by power distribution companies (discoms) on those consumers which buy electricity from any other source. These charges were capped by the union ministry of power but the discoms started levying variety of other charges such as additional surcharge. 

Addressing this problem, the ministry has also notified that for a person availing GNA or Open Access, the additional surcharge shall be linearly reduced and get eliminated within four years from the date of grant of access. 

The new rules also said the electricity tariff “shall be cost reflective and there shall not be any gap between approved Annual Revenue Requirement and estimated annual revenue from approved tariff except under natural calamity conditions.” Such gap, created if any, shall not be more than three percent of the approved Annual Revenue Requirement, it said. 

Releasing the Rules, the union minister for, new and renewable energy R. K. Singh said these rules will ensure that discom losses are reduced and their viability increases; leading to them having able to provide better services to the consumers.

“The doing away with the requirement of license for dedicated transmission lines for industry will lead to ease of doing business for the industry, leading to faster industrial growth and more job creation; the Minister stated. This, along with rationalisation of open access charges will lead to faster adoption of renewable energy by the industry, thus, reducing emission,” Singh said. 

The Minister said that this to the latest in the whole series of reforms carried out in the power sector under the Modi Government.