INDIA Law and Practice Contributed by: Anupam Varma, Poonam Verma Sengupta, Sakshi Kapoor and Rajesh Jha, JSA
under the Electricity Act are recognised as deemed transmission licensees and are not required to obtain a separate transmission licence. • Transmission licence : Other entities must obtain a transmission licence from CERC for inter-state transmission systems or the relevant SERC for intra-state transmission systems. Transmission projects are typically awarded either through tariff-based competitive bidding, following which the successful bidder is granted a transmission licence, or under the regulated tariff mechanism in accordance with the applicable regulatory frame- work (detailed in 4.1 Constructing and Operating Transmission Lines and Associated Facilities ). Notwithstanding the absence of exclusive territorial rights, transmission licensees are required to provide non-discriminatory open access to their transmission systems in accordance with the Electricity Act and the applicable regulatory framework. 4.6 Transmission Charges and Terms of Service Transmission charges and the terms of transmission service are governed by the Electricity Act, the appli- cable tariff regulations and the regulatory framework prescribed by CERC and the respective SERCs. Transmission Charges • Regulated tariff : For transmission projects devel- oped under the regulated tariff mechanism, trans- mission charges are determined by the appropriate Commission based on the Aggregate Revenue Requirement (see 5.6 Electricity Distribution Sys- tem Charges and Terms of Service ) of the trans - mission licensee in accordance with the applicable tariff regulations. • Tariff - based competitive bidding : For transmission projects developed through tariff-based competi- tive bidding, transmission charges are discovered through the bidding process and adopted by the appropriate Commission under Section 63 of the Electricity Act. • Sharing and recovery of inter - state transmission charges : The sharing and recovery of inter-state transmission charges are governed by the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020 (along with amend-
ments). The Regulations also address the allo- cation of transmission charges where there is a mismatch between the commissioning of the generating station and the associated transmission system. As a general principle, the entity responsi- ble for the delay bears the corresponding transmis- sion charges. Terms of Service Transmission licensees are required to execute trans- mission service agreements (TSAs) with: (a) their long- term customers or the CTU, in the case of inter-state transmission; and (b) their long-term customers, in the case of intra-state transmission, which provide the terms of the services to be provided by the licen- see (in addition to the terms provided in the transmis- sion licence). TSAs govern the commercial terms of transmission service and typically address conditions precedent and subsequent, achievement of financial closure, commissioning milestones, transmission availability obligations, payment mechanisms, change in control restrictions and lenders’ substitution rights. 4.7 Open-Access and Non-Discriminatory Transmission Transmission service is statutorily mandated to be provided on an open-access and non-discriminatory basis. The CTU and STUs are obligated to grant open access without bias, subject only to available trans- mission capacity and technical parameters. Users pay transparent, commission-approved transmis- sion charges and wheeling charges to utilise the grid, rather than paying the utility for the electricity itself. Statutory Framework Section 38 (for the CTU) and Section 39 (for STUs) of the Electricity Act mandate that all transmission entities must provide non-discriminatory open access to their transmission lines and associated facilities. Transmission licensees cannot arbitrarily refuse access. They function as a public utility; their sole purpose is to plan, operate and maintain the network. A power generator can request transmission access to evacuate power from its plant to the grid for sale. Similarly, a distribution licensee or an open-access bulk consumer can request transmission service to receive electricity supply sourced directly from a gen- erator or a power exchange. Access is granted strictly
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