Home India Ministry of Power Electricity (Second Amendment) Rules, 2023...
Date: 26-Jul-2023 Category: Extra Ordinary State: Union Government Country: India

Electricity (Second Amendment) Rules, 2023

Issued by Ministry of Power · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The gazette notification introduces the Electricity (Second Amendment) Rules, 2023, which amends the Electricity Rules, 2005.
  • These amendments focus on subsidy accounting and payment processes for distribution licensees and establish a framework for financial sustainability of these licensees.

Key Changes

  • Rule 15 of the Electricity Rules, 2005 is replaced with a new rule detailing subsidy accounting and payment. Distribution licensees must account for subsidies as per the Standard Operating Procedures issued by the Central Government.
  • State Commissions are required to issue quarterly reports for each distribution licensee within their jurisdiction. These reports should include findings on subsidy demands, energy consumption by subsidized categories, consumer category-wise per unit subsidy declared by the State Government, actual subsidy payments, and any gaps between due and paid subsidies.
  • Distribution licensees must submit quarterly reports within 30 days from the end of the respective quarter. State Commissions must examine and issue the report with corrections, if any, within 30 days of submission.
  • If subsidy payments are not made in advance, State Commissions will issue orders for tariff implementation without subsidy.
  • The State Commission shall take appropriate action against the concerned officers of the licensee for non-compliance as per provisions of the Act, if subsidy accounting and billing processes do not align with the Act, Rules, or Regulations.
  • A new Rule 20 is inserted to establish a framework for financial sustainability. Aggregate Technical and Commercial (AT&C) loss reduction trajectories approved by State Commissions must align with those agreed upon by State Governments and approved by the Central Government.
  • State Commissions will determine trajectories for collection and billing efficiency for distribution licensees, aligning with the approved AT&C loss reduction trajectory.
  • All prudent costs of power procurement incurred by distribution licensees to ensure 24x7 electricity supply and meet resource adequacy plan requirements will be considered, provided procurement is transparent or the procurement price is approved by the Appropriate Commission.
  • All prudent costs incurred by distribution licensees for creating assets for the development and maintenance of the distribution system will be pass-through, subject to conditions: asset creation aligns with the approved capex roll out plan, asset procurement is competitive and transparent, and the asset is geo-tagged and recorded in the Fixed Asset Register.
  • Gains or losses due to deviation from the approved AT&C loss reduction trajectory will be quantified based on the Average Power Purchase Cost and shared between distribution licensees and consumers. Two-thirds of gains will be passed to consumers, and one-third retained by the licensee. Two-thirds of losses will be borne by the licensee, and one-third by consumers.
  • State Commissions will determine operation and maintenance norms for distribution licensees based on guidelines issued by the Authority.
  • Reasonable Return on Equity (RoE) will be permitted based on the assessment of overall risk and the prevalent cost of capital.
  • The State Commission's RoE should align with the RoE specified by the Central Commission for generation and transmission in its Tariff Regulations, with appropriate modifications considering distribution business risks.

Impact Analysis

Distribution Licensees

  • Action Item: Ensure compliance with capex roll out plans and transparent procurement processes for asset creation.

State Commissions

  • Action Item: Update tariff regulations to align with the new RoE guidelines.

Consumers

  • Action Item: Monitor the performance of distribution licensees in terms of AT&C loss reduction and service quality.

Central Government

  • Action Item: Establish a process for approving AT&C loss reduction trajectories proposed by State Governments.

Key Entities Referenced

Electricity Act, 2003: The principal legislation governing the electricity sector in India. Section 176 provides the Central Government with the power to make rules to carry out the provisions of the Act. Electricity Rules, 2005: The rules framed under the Electricity Act, 2003, which are being amended by this notification. Central Government: The governing body responsible for making and amending the Electricity Rules. State Commissions: The regulatory bodies at the state level responsible for regulating the electricity sector within their respective jurisdictions. Distribution Licensees: Entities licensed to distribute electricity to consumers. Electricity (Rights of Consumers) Rules, 2020: Rules pertaining to the rights of electricity consumers. Electricity (Amendment) Rules 2022: Rules pertaining to amendments in electricity regulations.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-27072023-247640 xxxGIDHxxx CG-DL-E-27072023-247640 xxxGIDExxx असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (i) PART II—Section 3—Sub-section (i) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 438] नई दिल्ली, बुधिार, िुलाई 26, 2023/श्रािण 4, 1945 No. 438] NEW DELHI, WEDNESDAY, JULY 26, 2023/SHRAVANA 4, 1945 जिद्यतु मत्रं ालय अजधसचू ना नई दिल्ली, 26 िुलाई, 2023 सा.का.जन. 558(अ).—केन्द्रीय सरकार, जिद्युत अजधजनयम, 2003 (2003 का 36) की धारा 176 द्वारा प्रित्त िजियों का प्रयोग करते हुए, जिद्युत जनयम, 2005 को और सिं ोधन करने के जलए, जनम्न जलजखत जनयम बनाती ह,ै अर्ाात्: 1. (1) इन जनयमों का संजिप्त नाम जिद्युत (जद्वतीय संिोधन) जनयम, 2023 ह।ै (2) ये रािपत्र में उनके प्रकािन की तारीख को प्रिृत्त होंगे। 2. जिद्युत जनयम, 2005 (जिन्द्ह ेंइसमें इसके पश्चात उि जनयम कहा गया ह)ै के जनयम 15 के स्ट्र्ान पर, जनम्नजलजखत जनयम रखा िाएगा, अर्ाात ् “15. सजससडी लखे ाकं न तर्ा भगु तान:–(1) अजधजनयम की धारा 65 के अधीन भगु तान योग्य सजससडी का लेखांकन, इस संबंध में, केंरीय सरकार द्वारा िारी मानक प्रचालन प्रदियाओं के अनुसार जितरण अनुज्ञजप्तधारक द्वारा दकया िाएगा। (2) राज्य आयोग द्वारा, अपने न्द्यायाजधकार िेत्र में प्रत्येक जितरण अनज्ञु जप्तधारी के जलए, जतमाही ररपोर्ा िारी की िाएगी, जिसमें अन्द्य सुसंगत सयौरों के अजतररि इस जनष्कर्ा की सूचना िी िाएगी दक क्या सुसंगत जतमाही म ें जितरण अनुज्ञजप्तधारी द्वारा सजससडी की मांग, सजससडी प्राप्त श्रेणी द्वारा खपत की गई ऊिाा और राज्य सरकार द्वारा घोजर्त उपभोिा श्रणे ी-िार प्रजत यूजनर् सजससडी, अजधजनयम की धारा 65 के अनुसार सजससडी के िास्ट्तजिक भुगतान तर्ा िेय एिं भगु तान की गई सजससडी के बीच के अंतर लेखे के आधार पर की गई र्ी। 4857 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] स्ट्पष्टीकरण: इस जनयम के प्रयोिन के जलए, उपयुि आयोग द्वारा िारी संबद्ध जिजनयमों अर्िा र्ैररफ आिेिों के अनुसार, (‘यूजनर्’ िसि से दकलो िार् घंर्ा (केडसल्यूएच) अर्िा दकलो िार् (केडसल्य)ू अर्िा हॉसा पािर (एचपी) अर्िा दकलो िोल्र् एजम्पयर (केिीए) अजभप्रेत ह।ै (3) जितरण अनुज्ञजप्तधारी द्वारा जतमाही ररपोर्ा संबंजधत जतमाही की समाप्त तारीख से तीस दिन के भीतर प्रस्ट्ततु की िाएगी और राज्य आयोग ररपोर्ा की िांच करेगा, और उप-जनयम (2) के अनुसार, इसे प्रस्ट्तुत करने के तीस दिन के भीतर, संिोधनों, यदि कोई हों, के सार् िारी करेगा। (4) यदि सजससडी का अजिम भगु तान नहीं दकया गया ह ै तो, राज्य आयोग, अजधजनयम की धारा 65 के उपबंधों के अनुसार, जबना सजससडी के र्ैररफ के कायाान्द्ियन के जलए आििे िारी करेगा। (5) यदि सजससडी लेखांकन और सजससडी के जलए जबल िेन े की प्रदिया अजधजनयम अर्िा उसके अधीन जनयमों अर्िा जिजनयमों के अनुसार नहीं पाई िाती ह ैतो, राज्य आयोग, अजधजनयम के उपबंधों के अनुसार गरै -अनुपालन के जलए अनुज्ञजप्तधारी के संबंजधत अजधकारी के जिरूद्ध उपयुि कारािाई करेगा।” 3. उि जनयम म,ें जिद्यमान जनयम 20 की िम संख्या को जनयम 21 के रूप म ें पुनः संख्यादकत दकया िाएगा और इस िम संख्या 21 के पहल,े जनजम्नलजखत जनयम अतं र्िाष्ट दकया िाएगा, अर्ाात:् - “20. जित्तीय जस्ट्र्रता के जलए फ्रेमिका: (1) र्ैररफ जनधारा ण के जलए राज्य आयोगों द्वारा अनुमोदित की िान े िाली सकल तकनीकी एिं िाजणजज्यक हाजन में कमी की रेिेक्र्री संबंजधत राज्य सरकारों द्वारा सहमत और केन्द्रीय सरकार द्वारा अनुमोदित दकसी राष्ट्रीय स्ट्कीम अर्िा कायािम अर्िा अन्द्यर्ा के अनसु ार होगी। (2) जितरण अनुज्ञजप्तधारी के जलए, संिहण तर्ा जबललंग िोनों ििताओं के जलए रेिेक्र्री, के उप-जनयम (1) के अधीन अनुमोदित रेिेक्र्री के अनुसार राज्य आयोग द्वारा अिधाररत दकया िाएगा। (3) जिद्युत (उपभोिा अजधकार) जनयम, 2020 के अधीन उपभोिाओं की जिद्युत की 24X7 आपूर्त ा सुजनजश्चत करने के जलए और जिद्य़ुत (संिोधन) जनयम, 2022 के अधीन तैयार की गई संसाधन पयााप्तता योिना के अनुसार अपिे ाओं को परू ा करने के जलए, जितरण अनज्ञु जप्तधारी द्वारा की गई, जिद्युत की खरीि की समस्ट्त जििेकपूणा लागतों को गणना म ें सजम्मजलत दकया िाएगा, यदि ज िद्युत की खरीि पारििी ढंग से की गई हो अर्िा खरीि मूल्य का उपयिु आयोग द्वारा अनुमोिन दकया गया हो। (4) जितरण अनुज्ञजप्तधारी द्वारा अजधजनयम की धारा 42 की उप-धारा (1) के अनुसार जितरण प्रणाली के जिकास एिं अनुरिण के जलए पररसंपजत्तयों के जनमााण के जलए की गई समस्ट्त जििेकपूण ा लागत ें पास-थ्र ूहोंगी। परंत ु जितरण अनुज्ञजप्तधारी द्वारा जनर्मात पररसंपजत्तयों के जलए लागत का ऐसा पास-थ्र ू जनम्नजलजखत ितों के अधीन होगा:,- (i) पररसंपजत्त का जनमााण अनुज्ञजप्तधारी के जलए संबंजधत राज्य आयोग द्वारा अनुमोदित कैपेक्स रोल आउर् प्लान के अनुसार दकया गया हो; (ii) पररसंपजत्त की खरीि प्रजतस्ट्पधी एिं पारििी ढगं से की गई हो; (iii) पररसंपजत्त को जियो-र्ैग दकया गया हो और जनजश्चत पररसंपजत्त रजिस्ट्र्र म ें उजचत ढगं से ििा दकया गया हो ” (5) अनुमोदित सकल तकनीकी एिं िाजणजज्यक हाजन में कमी की रेिेक्र्री से जिचलन के कारण जितरण अनुज्ञजप्तधारी के लाभ अर्िा हाजन की गणना औसत जिद्युत िय लागत के आधार पर की िाएगी और जितरण अनुज्ञजप्तधारी तर्ा उपभोिाओं के बीच भागीिारी की िाएगी। र्ैररफ म ें लाभ का िो-जतहाई उपभोिाओं को िाएगा और िेर् जितरण अनज्ञु जप्तधारी द्वारा रखा िाएगा। हाजन की िो-जतहाई का िहन जितरण अनज्ञु जप्तधारी द्वारा दकया िाएगा और िेर् का िहन उपभोिाओं द्वारा दकया िाएगा। (6) जितरण अनज्ञु जप्तधारी के जलए प्रचालन एि ं अनुरिण मानिडं , प्राजधकरण द्वारा िारी दििा-जनििे ों के अनुसार राज्य आयोगों द्वारा अिधाररत दकए िाएंगे। (7) राज्य आयोग द्वारा इदिर्ी पर उजचत लाभ की अनुमजत समि िोजखम के मूल्यांकन और प्रचजलत पूंिी की लागत के आधार पर िी िाएगी।[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 3 (8) राज्य आयोग द्वारा इदिर्ी पर लाभ को संबंजधत अिजध के जलए, जितरण व्यापार में संबद्ध िोजखमों पर ध्यान िेते हुए उपयिु संिोधन के सार्, केंरीय आयोग द्वारा उत्पािन एि ं पारेर्ण के जलए अपन े र्ैररफ जिजनयमों म ें जनर्िाष्ट इदिर्ी पर लाभ के सार् संरेजखत दकया िाएगा। [फा. स.ं 23/18/2022-आरएंडआर] पीयूर् लसंह, संयुक् त सजचि रर्प्पण: मलू जनयम िर्ा 2005 में भारत के रािपत्र की अजधसूचना संख् या सा.का.जन. 379 (अ), तारीख 8 िून, 2005 द्वारा प्रकाजित दकए गए र् े और इन्द्ह ें अंजतम बार संख्य ा 817 (अ) तारीख 31 दिसंबर, 2020 तर्ा सा.का.जन.911 (अ) तारीख 29 दिसंबर, 2022 और सा.का.जन. 466 (अ) तारीख 30 िून, 2023 द्वारा संिोजधत दकया गया र्ा। MINISTRY OF POWER NOTIFICATION New Delhi, the 26th July, 2023 G.S.R. 558(E).—In exercise of the powers conferred by section 176 of the Electricity Act, 2003 (36 of 2003), the Central Government hereby makes the following rules, further to amend the Electricity Rules, 2005, namely:- 1. (1) These rules may be called the Electricity (Second Amendment) Rules, 2023. (2) They shall come into force on the date of their publication in the Official Gazette. 2. For rule 15 of the Electricity Rules, 2005 (hereinafter referred to as the said rules), the following rule shall be substituted, namely:- “15. Subsidy accounting and payment.-(1) The accounting of the subsidy payable under section 65 of the Act, shall be done by the distribution licensee, in accordance with the Standard Operating Procedures issued by the Central Government, in this regard. (2) A quarterly report shall be issued by the State Commission for each distribution licensee, in its jurisdiction, giving findings whether demands for subsidy were raised by the distribution licensee in the relevant quarter based on accounts of the energy consumed by the subsidised category and consumer category wise per unit subsidy declared by the State Government, the actual payment of subsidy in accordance with section 65 of the Act and the gap in subsidy due and paid as well as other relevant details. Explanation: For the purpose of this rule, (The term “Unit” means Kilo Watt Hour (kWh) or Kilo Watt (kW) or Horse Power (HP) or Kilo Volt Ampere (kVA), in accordance with the relevant Regulations or the Tariff Orders issued by the Appropriate Commission. (3) The quarterly report shall be submitted by the distribution licensee within thirty days from end date of the respective quarter andthe State Commission shall examine the report, and issue it with corrections, if any, in accordance with sub-rule (2), within thirty days of the submission. (4) In case the subsidy has not been paid in advance, then the State Commission shall issue order for implementation of the tariff without subsidy, in accordance with provisions of the section 65of the Act. (5) If subsidy accounting and the raising bills for subsidy is not found in accordance with the Act or Rules or Regulations issued there under, the State Commission shall take appropriate action against the concerned officers of the licensee for non-compliance as per provisions of the Act. 3. In the said Rules, the existing rule 20 shall be re-numbered as rule 21 and before rule 21 as so re-numbered, the following rule shall be inserted, namely:- “20. Framework for Financial Sustainability: (1) The Aggregate Technical and Commercial loss reduction trajectory to be approved by the State Commissions for tariff determination shall be in accordance with the trajectory agreed by the respective State Governments and approved by the Central Government under any national scheme or programme, or otherwise. (2) The trajectory for both collection and billing efficiency, for distribution licensee shall be determined by the State Commission in accordance with the trajectory approved under sub-rule (1). (3) All the prudent costs of power procurement, incurred by distribution licensee for ensuring 24x7 supply of electricity to consumers under the Electricity (Rights of Consumers) Rules, 2020 and for meeting requirements4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] as per Resource Adequacy plan prepared under the Electricity (Amendment) Rules 2022 shall be taken into account, provided that the procurement of power has been done in a transparent manner or procurement price has been approved by the Appropriate Commission. (4) All the prudent costs incurred by the distribution licensee for creating the assets for development and maintenance of distribution system in accordance with sub-section (1) of section 42 of the Act shall be pass- through: Provided that such pass-through of the cost for the assets created by the distribution licensee shall be subject to following conditions:,- (i) the asset has been created in accordance with the capex roll out plan for the licensee approved by the respective State Commission. (ii) the asset has been procured in competitive and transparent manner. (iii) the asset is geo-tagged and properly recorded in Fixed Asset Register. (5) Gains or losses accrued to distribution licensee due to deviation from approved Aggregate Technical and Commercial loss reduction trajectory shall be quantified on the basis of Average Power Purchase Cost and shared between the distribution licensee and consumers. Two third of the gains shall be passed on to the consumers in tariff and rest shall be retained by the distribution licensee. Two third of the losses shall be borne by the distribution licensee and rest shall be borne by the consumers. (6) The operation and maintenance norms for distribution licensee shall be determined by the State Commissions in accordance with the guidelines issued by the Authority. (7) Reasonable Return on Equity shall be permitted, with the assessment of overall risk and the prevalent cost of capital. (8) The Return on Equity by the State Commission shall be aligned with the Return on Equity specified by the Central Commission for generation and transmission in its Tariff Regulations for the relevant period, with appropriate modification taking intoaccount the risks involved in distribution business. [F. No. 23/18/2022-R&R] PIYUSH SINGH, Jt. Secy. Note: The Principal Rules were published 2005 in the Gazette of India, Part-II, Section 3, Sub-section (i) vide number G.S.R 379 (E), dated the 8th June, 2005 and was last amended vide number G.S.R. 817 (E), dated 31st December, 2020 and vide number G.S.R. 911 (E), dated 29th December, 2022 and vide number G.S.R 466 (E), dated the 30th June, 2023. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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