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, 2006
Objective
- Ensuring optimal development of the transmission network 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
- Even for the Public Sector projects, tariff of all new transmission projects should be decided on the basis of competitive bidding after a period of five years or when the Regulatory Commission is satisfied that the situation is ripe to introduce such competition.
[Clause No. 5]
[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. 5.3(i)]
[Clause No. 5.3(i)]
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.
- Investment by transmission developer other than CTU/STU would be invited through competitive bids. The Central Government will issue guidelines in three months for bidding process for developing transmission capacities.
- After the implementation of the proposed framework for the inter-State transmission ,a similar approach should be implemented by SERCs in next two years for the intra-State transmission.
- Metering compatible with the requirements of the proposed transmission tariff framework should be established on priority basis.
[Clause No. 7.1]
- Investment by transmission developer other than CTU/STU would be invited through competitive bids. The Central Government will issue guidelines in three months for bidding process for developing transmission capacities.
- After the implementation of the proposed framework for the inter-State transmission ,a similar approach should be implemented by SERCs in next two years for the intra-State transmission.
- Metering compatible with the requirements of the proposed transmission tariff framework should be established on priority basis.
[Clause No. 7.1]
Resolution By
Ministry of Power
Date of Notification
1/6/2006
Tariff Policy, 2006 - Amendment
Resolution By
Ministry of Power
Date of Notification
3/31/2008