National Tariff Policy
Tariff Policy was formulated by the Ministry of Power, as per Section 3(1) of Electricity Act 2003 in 2006 and subsequently revised in 2016. The policy aims to ensure optimal development of the transmission network and attract investment in the sector. The policy encourages competitive bidding for transmission projects, apart from laying down a framework for performance-based cost of service regulation for transmission and guiding principle for transmission pricing.
Tariff Policy, 2016
Objective
- Ensuring optimal development of the transmission network ahead of generation with adequate margin for reliability and to promote efficient utilization of generation and transmission assets in the country.
- Attracting the required investments in the transmission sector and providing adequate returns.
[Clause No. 7.0]
- Attracting the required investments in the transmission sector and providing adequate returns.
[Clause No. 7.0]
General Approach to tariff
- The tariff of all new transmission projects owned or controlled by the Central Government shall continue to be determined on the basis of competitive bidding unless otherwise specified on case to case basis.
- Intra-state transmission projects shall be developed by State Government through competitive bidding process for projects costing above a threshold limit which shall be decided by the SERCs.
- The Appropriate Government as well as the Appropriate Commission while implementing plans shall ensure viability in terms of recovery of all prudent costs.
[Clause No. 5]
- Intra-state transmission projects shall be developed by State Government through competitive bidding process for projects costing above a threshold limit which shall be decided by the SERCs.
- The Appropriate Government as well as the Appropriate Commission while implementing plans shall ensure viability in terms of recovery of all prudent costs.
[Clause No. 5]
Return on Investment
The rate of return notified by CERC for transmission may be adopted by the SERCs for distribution with appropriate modification taking into view the risks involved. For uniform approach in this matter, it would be desirable to arrive at a consensus through the Forum of Regulators.
[Clause No. 5.11(a)]
[Clause No. 5.11(a)]
Benefits under Clean Development Mechanism (CDM)
Tariff fixation for all electricity projects (G,T and D) that result in lower Green House Gas (GHG) emissions than the relevant base line should take into account the benefits obtained from the Clean Development Mechanism (CDM) into consideration, in a manner so as to provide adequate incentive to the project developers.
[Clause No. 5.11(i)]
[Clause No. 5.11(i)]
Renewable sources of energy
No inter-State transmission charges and losses may be
levied till period as may be notified by the Central Government on transmission of the electricity generated from solar and wind sources of energy through the inter-state transmission system for sale.
[Clause No. 6.4]
levied till period as may be notified by the Central Government on transmission of the electricity generated from solar and wind sources of energy through the inter-state transmission system for sale.
[Clause No. 6.4]
Transmission pricing
The ultimate objective of levying Transmission charges is to get the transmission system users to share the total transmission cost in proportion to their respective utilization of the transmission system.
- For smooth operation of the grid, efforts should be made to develop transmission system ahead of generation.
- While all future inter-state transmission projects shall, ordinarily, be developed through competitive bidding process, the Central Government may give exemption from competitive bidding for (a) specific category of projects of strategic importance, technical upgradation etc. or (b) works required to be done to cater to an urgent situation on a case to case basis.
[Clause No. 7.1]
- For smooth operation of the grid, efforts should be made to develop transmission system ahead of generation.
- While all future inter-state transmission projects shall, ordinarily, be developed through competitive bidding process, the Central Government may give exemption from competitive bidding for (a) specific category of projects of strategic importance, technical upgradation etc. or (b) works required to be done to cater to an urgent situation on a case to case basis.
[Clause No. 7.1]
Resolution By
Ministry of Power
Date of Notification
1/28/2016