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The government proposes an automatic monthly modification of the electricity tariff according to the cost of fuel

By on August 13, 2022 0

People’s electricity bill is subject to change depending on the development of fuel cost, purchase cost of electricity and transportation cost, according to the Draft Electricity Rules (Amendment) of 2022.

The project suggested that the Fuel and Electricity Purchase Adjustment Surcharge (FPPAS) signifies the increase in the cost of electricity, supplied to consumers, due to the change in the cost of fuel, the cost of purchase of electricity and transmission costs with reference to the cost of supply approved by the State Commission. . FPPAS will be calculated and billed to consumers, automatically, without going through the regulatory approval process, on a monthly basis, according to the formula prescribed by the respective State Commission, subject to annual adjustment as decided by the State Commission.

The Ministry of Energy has solicited comments from the National Solar Power Federation of India, FICCI, ASSOCHAM, Electric Power Transmission Association, Discoms CMDs/MDs /Gencos from all state governments and others on draft rules by 9/11.

This came after the Electricity (Amendment) Bill 2022 was introduced in Parliament during the winter session. However, it was later sent to the standing committee for further deliberation amid protests from several opposition parties.

The draft also suggested that the surcharge payable by consumers seeking open access should not exceed 20% of the average cost of supply.
The Department of Energy has stated that the appropriate Commission must, within 90 days of the publication of these rules, specify a price adjustment formula for the recovery of costs, resulting from the variation in the price of fuel or the costs electricity purchase and the impact on the cost due to this variation is automatically passed on to the consumer tariff on a monthly basis according to this formula. This monthly automatic adjustment will be adjusted on an annual basis by the appropriate Commission, he said.

The ministry said that the distribution licensee will consider the subsidy due according to the SOP by the central government and the State Commission will review the adequacy of resources every six months for each of the distribution licensees.
The draft also suggested that the Authority rule on the cases of granting approval to the hydroelectric production system within 150 days and decide on the granting of approval to the off-river pumped storage plant project in the 90 days.

The energy storage system (ESS) developer/owner will have the option to sell/lease/lease the storage space in whole or in part to any utility engaged in generation, transmission or distribution or to a load dispatch center. The autonomous SSE will be a licensed activity at par with a production company.

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