Amendments in Electricity Rules Add Clarity On Energy Storage, Open Access Charges

Changes to Electricity Rules

In a notification on changes to the Electricity Rules for Consumers, the government has sought to add a level of clarity on charges payable by consumers, as well as the status of energy storage systems.

Limit To Open Access Charges

The notification starts off by establishing a limit of 20% of the cost of supply on the surcharge as determined by the State Commission under clause (a) of sub-section (1) of section 86 of the Electricity Act,2003 shall not exceed twenty per cent of the average cost of Supply. The clarification is an obvious effort to counter the levying of unreasonable charges by many discoms to dissuade consumers from shifting to other power sources, for instance.

While the rules do not specific it as such, industry in particular will hope for clarity on this limit being applicable to all the omnibus charges added on by discoms.

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For renewable players, the next key element of the changes is the clarifications related to energy storage systems.

The focus here is on enabling clear policy for independent energy storage system providers, as well as allow for better utilisation and possibly, construction of larger energy storage systems.

Thus, the rules specify that “The Energy Storage System can be developed, owned, leased or operated by a generating company or a transmission licensee or a distribution licensee or a system operator or an independent energy storage service provider and when an Energy Storage System is owned and operated by and co-located with a generating station or a transmission licensee or a distribution licensee, it shall have the same legal status as that of the owner:

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Provided that if such an Energy Storage System is not co-located with, but owned and operated by, the generating station or distribution licensee, the legal status shall still be that of the owner but for the purpose of scheduling and dispatch and other matters it shall be treated at par with a separate storage element.

The developer or owner of the Energy Storage System shall have an option to sell or lease or rent out the storage space in whole or in part to any utility engaged in generation or transmission or distribution; or to a Load Despatch Centre:

Provided that the owner of the Energy Storage System may use part or whole of the storage space himself to buy and store electricity and sell the stored electricity at a later time or date. 

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The independent energy storage system shall be a delicensed activity at par with a generating company in accordance with the provisions of section 7 of the Act: Provided that if the owner or developer or lessee or tenant or user seeks to operate the Energy Storage System as an independent energy storage system, it shall be registered with the Authority and the capacity of such Energy Storage System shall be verified by the Authority.”

Among others, clear timelines have been set for responses from the central Electricity Regulatory Commission for petitions linked to pricing and permissions, before they can be escalated to the APTEL. To view the full notification, click here.