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A new inter-State transmission charge norm is in the offing, which could make it relatively cheaper for upcoming power projects, especially large, inter-State projects, to wheel the generated electricity to customers across regions.
The Central Electricity Regulatory Commission (CERC) is expected to announce the order shortly, paving the way for the implementation of the new ‘Point of Connection (PoC)' model, which will replace the current ‘Regional Postage Stamp' method that is followed for calculating inter-State transmission charges and losses.
The new norm was earlier set for implementation from April 1, but delays in the signing of the standard transmission service agreement by the Central Transmission Utility (CTU) with the regional beneficiaries is likely to push back the implementation schedule by a couple of months. The Commission would approve procedures submitted by the CTU for implementation of the scheme in its order.
The new regulation on ‘sharing of inter-State transmission charges and losses' mainly aims at developing a uniform transmission charge sharing mechanism among grid constituents and avoiding “pancaking” of transmission charges for power transmitted across regions, as is being experienced under the current (postage stamp) regime.
Under the current method, States in a region share the charges and losses of transmission on a pooled basis in the ratio of quantum of power drawn through the inter-State transmission system. For instance, a State in the northern region buying power from a State in the eastern region will have to pay for pooled transmission charges and losses of both the northern and eastern regions.
Under the new PoC proposal, transmission charges will be differentiated on a location basis, and the generators will have to take a view on transmission costs of electricity as well as on transportation costs of fuel.
“The net effect of the transition could be that the new crop of projects, especially large IPPs (private projects), that plan to sell power across regional borders, could see transmission charges coming down,” an official involved in the exercise said.
The Indian power system is divided into five regional grids — Northern Region, Eastern Region, North-eastern Region, Western Region and Southern Region. State utilities within particular region are considered as the constituents of that region.
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