A new inter-State power transmission charge regime is to come into effect from July 1.
Under the proposed ‘Point of Connection' (PoC) regime for calculating inter-State transmission charges and losses, wheeling power from large projects to customers across longer distances could be cheaper.
These include projects such as the 4,000-MW ultra mega power projects being developed by Tata Power and Reliance Power, where beneficiaries are spread across the regional grids.
The new regime is also expected to foster greater competition in the spot market, especially with merchant project developers getting a boost.
The implementation of the new PoC model, which will progressively replace the ‘Regional Postage Stamp' method being followed currently, could make it relatively cheaper for an upcoming power project in, say, the north-eastern State of Arunachal Pradesh to route power to the southern States of Kerala or Tamil Nadu.
Delay in implementation
The new norms were earlier set for implementation from April 1, but delays in the signing of the standard transmission service agreement pushed back the implementation schedule by a couple of months.
“The new regulation on sharing of inter-State transmission charges and losses 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,” the Central Electricity Regulatory Commission Chairman, Dr Pramod Deo, said.
He said that to begin with, a hybrid model entailing 50 per cent of the old regime and 50 per cent of the new model is being ushered in, with progressive increase in the new regime over the next three years.
Under the new regime, the notional path or the geographical regions falling between the point of injection and point of drawal are inconsequential. The same PoC rates would be applicable for long-term, medium-term and short-term transactions.
Under the current method being followed, 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.