Electricity (Second Amendment) Rules, 2023

EXTRAORDINARY PART II —Section 3 —Sub-section ( i) PUBLISHED BY AUTHORITY No. 438] NEW DELHI, WEDNESDAY, JULY 26, 2023/ SHRAVANA 4, 194 5 CG-DL-E-27072023-247640 MINISTRY OF POWER NOTIFICATION New Delhi, the 26th July, 2 023 G.S.R. 558(E).—In exercise of the powers conferred by section 176 of the Electricity Act, 2003 (36 of 2003), the Central Government hereby makes the following rules, further to amend the Electricity Rules, 2005, namely: - 1. (1) These rules may be calle d the Electricity (Second Amendment) Rules, 2023. (2) They shall come into force on the date of their publication in the Official Gazette. 2. For rule 15 of the Electricity Rules, 20 05 (hereinafter referred to as the said rules), the following rule shall be substituted, namely: - “15. Subsidy accounting and payment. -(1) The accounting of the subsidy payable under section 65 of the Act, shall be done by the distribution licensee, in ac cordance with the Standard Operating Procedures issued by the Central Government, in this regard. (2) A quarterly report shall be issued by the State Commission for each distribution licensee, in its jurisdiction, giving findings whether demands for subsi dy were raised by the distribution licensee in the relevant quarter based on accounts of the energy consumed by the subsidised category and consumer category wise per unit subsidy declared by the State Government, the actual payment of subsidy in accordanc e with section 65 of the Act and the gap in subsidy due and paid as well as other relevant details. Explanation: For the purpose of this rule, (The term “Unit” means Kilo Watt Hour (kWh) or Kilo Watt (kW) or Horse Power (HP) or Kilo Volt Ampere (kVA), in a ccordance with the relevant Regulations or the Tariff Orders issued by the Appropriate Commission. (3) The quarterly report shall be submitted by the distribution licensee within thirty days from end date of the respective quarter andthe State Commission s hall examine the report, and issue it with corrections, if any, in accordance with sub -rule (2), within thirty days of the submission. (4) In case the subsidy has not been paid in advance, then the State Commission shall issue order for implementation of t he tariff without subsidy, in accordance with provisions of the section 65of the Act. (5) If subsidy accounting and the raising bills for subsidy is not found in accordance with the Act or Rules or Regulations issued there under, the State Commission shall take appropriate action against the concerned officers of the licensee for non -compliance as per provisions of the Act. 3. In the said Rules, the existing rule 20 shall be re -numbered as rule 21 and before rule 21 as so re -numbered, the following rule sha ll be inserted, namely: - “20. Framework for Financial Sustainability: (1) The Aggregate Technical and Commercial loss reduction trajectory to be approved by the State Commissions for tariff determination shall be in accordance with the trajectory agreed b y the respective State Governments and approved by the Central Government under any national scheme or programme, or otherwise. (2) The trajectory for both collection and billing efficiency, for distribution licensee shall be determined by the State Comm ission in accordance with the trajectory approved under sub -rule (1). (3) All the prudent costs of power procurement, incurred by distribution licensee for ensuring 24x7 supply of electricity to consumers under the Electricity (Rights of Consumers) Rules, 2020 and for meeting requirements as per Resource Adequacy plan prepared under the Electricity (Amendment) Rules 2022 shall be taken into account, provided that the procurement of power has been done in a transparent manner or procurement price has been a pproved by the Appropriate Commission. (4) All the prudent costs incurred by the distribution licensee for creating the assets for development and maintenance of distribution system in accordance with sub -section (1) of section 42 of the Act shall be pass - through: Provided that such pass -through of the cost for the assets created by the distribution licensee shall be subject to following conditions:, - (i) the asset has been created in accordance with the capex roll out plan for the licensee approved by th e respective State Commission. (ii) the asset has been procured in competitive and transparent manner. (iii) the asset is geo -tagged and properly recorded in Fixed Asset Register. (5) Gains or losses accrued to distribution licensee due to deviation from approved Aggregate Technical and Commercial loss reduction trajectory shall be quantified on the basis of Average Power Purchase Cost and shared between the distribution licensee and consumers. Two third of the gains shall be passed on to the consumer s in tariff and rest shall be retained by the distribution licensee. Two third of the losses shall be borne by the distribution licensee and rest shall be borne by the consumers. (6) The operation and maintenance norms for distribution licensee shall be de termined by the State Commissions in accordance with the guidelines issued by the Authority. (7) Reasonable Return on Equity shall be permitted, with the assessment of overall risk and the prevalent cost of capital. (8) The Return on Equity by the State Commission shall be aligned with the Return on Equity specified by the Central Commission for generation and transmission in its Tariff Regulations for the relevant period, with appropriate modification taking intoaccount the risks involved in distribution business. [F. No. 23/18/2022 -R&R] PIYUSH SINGH, Jt. Secy . Note: The Principal Rules were published 2005 in the Gazette of India, Part -II, Section 3, Sub -section (i) vide number G.S.R 379 (E), dated the 8th June, 2005 and was last amended vide number G.S. R. 817 (E), dated 31st December, 2020 and vide number G.S.R. 911 (E), dated 29th December, 2022 and vide number G.S.R 466 (E), dated the 30th June, 2023. 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.