In exercise of the powers conferred by clause r of sub section 1 of section 61 of the Petroleum and Natural Gas Regulatory

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-26042024-253867 EXTRAORDINARY PART III—Section 4 PUBLISHED BY AUTHORITY No. 279] NEW DELHI, THURSDAY, APRIL 25, 2024/VAISAKHA 5, 1946 PETROLEUM AND NATURAL GAS REGULATORY BOARD NOTIFICATION New Delhi, the 25th April, 2024 F. No. PNGRB/Auth/1-CGD(16)/2020 (Vol-II) (E-4599)- In exercise of the powers conferred by clause (r) of sub-section (1) of section 61 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) and other applicable provisions of the said Act, the Petroleum and Natural Gas Regulatory Board hereby makes the following regulations, in supersession of the Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring City or Local Natural Gas Distribution Networks as Common Carrier or Contract Carrier) Regulations, 2020, so as to be guided by the objectives laid down under sub-section (5) of section 20of the Petroleum and Natural Gas Regulatory Board Act, 2006:- 1. Short title and commencement: (1) These regulations may be called the Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring City or Local Natural Gas Distribution Networks as Common Carrier or Contract Carrier) Regulations, 2024. (2) They shall come into force on the date of their publication in the Official Gazette. 2. Definitions: (1) In these regulations, unless the context otherwise requires, - (a) "Act" means the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006); (b) "Associate", in relation to a person, includes such another person or vice versa; — (i) who, directly or indirectly, by himself, or in combination with some other persons, exercises control over the first said person; or (ii) who holds control of at least twenty percent of the total voting right of the first person; or (iii) who is a holding company or a subsidiary company of the first said person; or (iv) who in the view of the Board is considered as an associate based on the facts and factors including the extent of control, independence and conflict of interest; (c) "Authorized area" shall have the meaning as defined in clause (c) of sub-regulation (1) of regulation 2of the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008; (d) "Authorized entity" shall have the meaning as defined in clause (d) of section 2 of the Act; (e) "Board" shall mean the Petroleum and Natural Gas Regulatory Board; (f) "CGD network” means a "city or local natural gas distribution network” as defined in clause (i) of section 2 of the Act; (g) "common carrier or contract carrier capacity" means the capacity in a CGD network for open access, as declared by the authroised entity under the Petroleum and Natural Gas Regulatory Board (Access Code for City or Local Natural Gas Distribution Networks) Regulations, 2020, over and above the authorized entity's own requirement; (h) “CGD network capacity" shall have the same meaning as defined in clause (g) of sub-regulation (1) of regulation 2 of the Petroleum and Natural Gas Regulatory Board (Determining Capacity of City or Local Natural Gas Distribution Network) Regulations, 2015; (i) "marketer" shall have the same meaning as defined in clause (t) of regulation 2 of the Petroleum and Natural Gas Regulatory Board (Access Code for City or Local Natural Gas Distribution Networks) Regulations, 2020; (j) "marketing exclusivity" shall mean the exclusivity from the purview of common carrier or contract carrier as specified in regulation 6 of the Petroleum and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas Distribution Network) Regulations, 2008; (k) "own requirement”, in respect of an authorized entity, means that part of the CGD network capacity, which is utilized by the authorized entity or its associates, including the system use gas; (l) "system use gas” shall have the same meaning as defined in clause (zg) of sub-regulation (1) of regulation 2 of the Petroleum and Natural Gas Regulatory Board (Access Code for City or Local Natural Gas Distribution Networks) Regulations, 2020 (2) Words and expressions used and not defined in these regulations, but defined in the Act or in the rules or other regulations made thereunder, shall have the meanings respectively assigned to them in the Act or in such rules or other regulations, as the case may be. 3. Applicability. These Regulations shall apply to an authorised entity after completion of time period for exclusivity from the purview of common carrier or contract carrier as mentioned in the Authorization Letter of an authorised area. 4. Objectives. The objective of these regulations is to implement the provisions of sub-section (5) of section 20 of the Act to achieve the objectives stated therein, namely: - (a) protecting the interests of consumers by fostering fair trade and competition amongst the entities; (b) promoting competition among entities; (c) avoiding infructuous investment; or (d) maintaining or increasing supplies or for securing equitable distribution or ensuring adequate availability of natural gas to consumers. As per the Petroleum and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas Distribution Network) Regulations, 2008, the authorized entities are mandated to meet the service obligations and are obliged to reach out to every charge area in the authorized GAs within the exclusivity period from the purview of common carrier or contract carrier. In case, wherein authorized entity has reached all the charge areas within the exclusivity period there should be option of new players or suppliers within the authorized Geographical areas to foster competition among entities and protect the interests of the consumers in terms of gas availability at competitive rates. Accordingly, in such case the Board may declare their CGD networks as common carrier or contract carrier following the procedures mentioned in the aforesaid Regulation. In case, wherein authorized entity has not reached all the charge areas, in such case the area which has been covered by the authorized entity shall be opened for open access to foster competition among entities and protect the interests of the consumers in terms of gas availability at competitive rates. The rest area shall be considered for open access based on rationale of the Petroleum and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas Distribution Network) Regulations, 2008. 5. Guiding Principles for Declaring the City or Local Natural Gas Distribution Network of an authorised area as Common Carrier or Contract Carrier. The Board shall, in seeking to declare CGD Network of an authorised entity as a common carrier or contract carrier, follow the provisions of these regulations which constitute the guiding principles to be followed by the Board for declaring the CGD network as a common carrier or contract carrier under section 20 of the Act. The authorized entity is required to develop CGD networks as per the authorization in compliance of the mandate of the Act and provisions of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008. In general, the authorized entity may be granted two kinds of Exclusivity; that it is to say a) for laying, building or expansion of the CGD network; and b) in terms of an exemption from the purview of the contract carriage or common carrier for a limited period of time. The Rationale for granting exclusivity is provided under extant CGD exclusivity Regulations. Clause (a) of section 11 of the Act provides for the function of Board as to “protect the interest of consumers by fostering fair trade and competition amongst the entities." Accordingly, Post completion of exclusivity period of exemption from the purview of contract carrier or common carrier, the respective CGD networks shall be declared as common carrier/contract carrier so that the functions of clause (a) of section 11 of the Act can be implemented. Since every CGD networks are different in terms of geography, population, demand, availability of natural gas and like other gas, one principle cannot be implemented to all CGD networks. Accordingly, the Board shall be guided by the factors as given under Section 20 (5) of the Act while declaring a CGD network as common carrier or contract carrier under these regulations, 6. Procedure for Declaring the CGD Network of an authorised area as a Common Carrier or Contract Carrier or Regulating or Allowing Access thereto under Section 20 of the Act. (1) The Board before forming an opinion for declaring a CGD Network as Common Carrier or Contract Carrier, shall give an opportunity of being heard, to an authorised entity and after hearing, shall form its opinion thereof, within fifteen days from the date of hearing to an authorised entity. (2) Thereafter, the Board shall issue (including webhosting), a public notice in one national and one vernacular daily newspaper (of the relevant authorized area) of its intention to declare the CGD network of an authorised entity as common carrier or contract carrier or regulate or allow access to such CGD network, giving brief details of the relevant CGD network that the Board is intending to regulate or allow access to, or declare as a common carrier or contract carrier and invite objections and suggestions, if any, within thirty days from the date of issuance of such public notice from all persons and entities (including the authorised entity) likely to be affected by such decision: Provided that in case, an authorised entity does not submit any objections and suggestions, it shall be presumed that it has no objection to the Board's intention stated in the public notice. (3) On expiry of the period allowed for submission of objections and suggestions, if any, under sub- regulation (2), the Board shall forward the objections and suggestions so received, to the authorized entity with the direction to submit its response within fifteen days. (4) After expiration of time period for submission of the response by an authorised entity under sub- regulation (3), the Board shall provide an opportunity of being heard, to an authorised entity, on the issue as to why its CGD network should not be declared a common carrier or contract carrier or why there no third party should be provided access to its CGD. (5) The Board may invite all stakeholders including such persons who have offered their objections and suggestions under sub-regulation (2) along with an authorized entity, whose CGD Network is to be declared as a Common Carrier or Contract Carrier, for an open house meeting. (6) The Board shall after completion of the process of holding an open house under sub-regulation (5), notify its decision as to whether it is declaring the CGD network as a common carrier or contract carrier network or regulating access or allowing access to the same, and the applicable terms and conditions and the date from which such decision shall come into effect. (7) The authorized entity may, on its own, apply to the Board seeking declaration of the CGD network in its authorised area as a common carrier or contract carrier network. The Board may after following the process specified in sub-regulations (1) to (7) as may be mutantis mutandis applicable, declare such CGD network as a common carrier or contract carrier network on such terms and conditions and from such date as the Board may deem fit. 7. Miscellaneous. (1) The Board shall have the power to issue clarifications with regard to these regulations and in case of any dispute, the clarification given by the Board shall be final and binding. (2) If any question arises as to the interpretation of these regulations, the same shall be decided by the Board. 8. Repeal: The Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring City or Local Natural Gas Distribution Networks as Common Carrier or Contract Carrier) Regulations, 2020 shall stand repealed. VANDANA SHARMA, Secy. [ADVT.-III/4/Exty./048/2024-25] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.