No, 29728/2021-RER Government of Inia Ministry of Power ‘Shram Shakti Bhawan, Rai Marg New Delhi, o" November, 202% Principal Secretaies/Secretaries (PowerEnergy) of all State GoverentsUTS Secretaries of All State Elecity Regulatory Commissions/JERCs, CChairmanvCMDs of all PSUs under administrative control of Ministry of Power CCMDsIMDs of Discoms/Gencos of al Stale Governments (CMDs of CPUS CMDs of Coss ‘Subject: Automatic pass through of the fuel and power procurement cost in tariff for ‘ensuring the viability ofthe power sector regarding Si, 1. Power sector has been witnessing issues relating to avaiablty of fuel, mainly coal and 1988 forthe power plants. Recently there was @ sudden spike in the price of coal and gas inthe international markets. 2. The Central Government after detailed consultation with all the stake holders of power sector has notified Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 on 22.10.2021 providing for an automatic pass through of impact in cost due to change in law ‘automaticaly by a formula, 3. Learning from the recent experience and in order to ensure thatthe power sector does ot face any constrains in maintaining assured power supply to meet the demand, all the stakeholders in the value chain of power sector must ensure that there is timely recovery of cost This involves two steps: ‘2, The coet passthrough by the the generating companies to the dstibulon companies, The cost pass through fem distribution companies tothe consumer. 4. For the lack ofa robust mechanism of timely automatic passthrough of fuel cost and ‘wansporiation cost, the generating companies face constraints in minting stock of fuel during such periods. This results in shortage of supply inthe grid which may affect the power ssuppy to the consumer. 5, Distribution companies face revenue constrains as the correspondieg pass though of cost is not done regulary and timely in the retall taf. Timely collection of revenue from consumer would ensure timely payment by the cistibution company to the generating stations ‘and coal companies. This will ao help in ensuring availabilty of supply to meet the expected inereate in demand &6. Section 62(4) of the Electricity Act provides that tarif or part of any tarif can be ‘amended more frequently than once in any financial year in respect of any changes expressly permitted under he terms of any fuel surcharge formulae as may be specified 7. Some ofthe states already have formula for fue! surcharge adjustment which is being used for ths purpose. A state wise st of the status of fuel surcharge formula prescribed bythe ‘State Commission is enclosed, Ths is as per the information submited by the SERCs to Forum ‘of Reguators in compliance of the APTEL order. However, this isnot an automatic pass through {and there remains need for approval of the State Commission. The present mechanism leads to Clays. t may be changed to provide for automatic pass through in taf cxange in costs on ‘account of change in law power purchase costs in accordance with a formul aid down by the State Regulatory Commissions. The Discams wil pass through the change in costs accorcing to the said formula whenever the change in costs due to change in lawipower purchase costs ‘occur. Til a suitable formula is prescribed by the State Commissions the formula given inthe Etecticty (Timely Recovery of Costs due to Change in Law) Rules, 2021 may be adopted. Aer iving affect tothe passthrough the Discoms wil sena the relevant papes/cziculation sheets to the commissions which shal verily and confirm the Pass through within 60 days, Ths wil resuit in less working capital requirements by the Discoms, leading to less costs of power forthe 8. The State Governments have the powers to give subsidy in consumer tai, by advance payment of subsidy to distribution companies under Section 65 ofthe Elacricly Act. 9, The Stato Commissions are roquested to place the above mechanism in operation with Immediate effect. 410. This iasues withthe approval of the Competent Author Yours faitfuly Enel: As above J (Giznshyam Prasad) Joint Secretary tothe Govt. of India Ph: 011-23730309 Copy to: PS to Hon'ble MoP, APS to Hon'ble MOSP, Sx, PPS to Secy(P), S: PPS to JS(RAR) MoPcitirdat-BRABABRE- Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021.pa "THE GAZETTE OF INDIA - EXTRAORDINARY (Parsee 30) MINISTRY OF POWER NOTIFICATION New Deli the 2nd Octobe, 2021 GSR. 7510). —tn execs of he power confered by sib section (1), red with clase of sub scon 2, of section 16 of the leit Ac, 205 (36 of 203), the Cental Goverment barby mak the flowing es, sly 1. Short tite, commencement and application —() These rules may be called the Hecticty Timely ‘Recovery of Cost ds to Change in Law) Rules, 2021, (2) They shal come into freon the ute of hi palcaon inthe Oil Gaze (6) These ules sal apply to a geneatog company en wns ene, 2 Definitions — (1) In thes ules, ules te context otervise equi (@) "Act means he BlecicyAct, 2008 (36 of 2003, (0) aprement” means an agerent fore puchas, spy or wansson of det exer int er the Ae (6) "shane in in elation ttf unless otherwise defined in the are meas any conctnest ‘or amendment or pel of ty law, made atthe deeinato of ti wna eton&@ or seton 63 ofthe ‘At ending tcoreponding shane nth cot reuing change er, dca — (a ange in imerpetation of any aw bya compte ou i) change in ay domestic te, nln duty ery, ces, cbarge or sahag by the esa ‘Govemmeat, Sia Goverment of Union tetor aminisratca dingo conegondig changes inthe (Gi a ehage in any coniton of an approval orien obained ro be eine for purchase, supply or sansmision of clr, unless spsficlly excnded inthe ageen! forthe phase, ‘apply or vansnsion of elect, which ess in ny change inthe on, but doe nt inelade— (4) ay elaage in ay wiiolig tx on income o dividends disttued the deol of the generating company o¢ tannin Heese; (8) cng inept of devin setement cages or equncy intervals by an Appeopete comission, (@) "ow? inl any At Ordnance, cdr bean le regulation, notation er the tine being in ore, the teary of nin. (2) The words and expresons used an not defined erin but defined inthe Act hl have te mening sespctively assigned then inthe Act. 4 Adjustment in taf onchange in law.— (I) On be accureoce ofa change io law, tbe monthly ti or charges shal eased nd be eevee i cerdance with the sto compen the ted pry soe 0 ‘ase uch affectd party tothe same ean poston aif such age naw ad nooo, (2) Forte purposes of ubsule(), the geuraing company or wansmsion Hesse, beg he att pay, hich intent adjust and recover the costs de change i sal give thee weeks rr nt fo the ober ary about th proposed impact inthe tif or charges, postive or naive, tobe revered fom uch tbe (2) The afte pry shall amish othe ther pay, the compution of impact in tor cares fo be cj and recovered win thiy dy ofthe osarence ofthe chang in nw oon he expo ie mek fom the dt of he oie reed to in url (2), whichever is, nthe ecovey of the propor inpct in ti or charges sal it fom he net biling eee ofthe i (4) The impet feng inlaw be arte and rcovered may be computed 8 ote or monthly care x per ut buss oF combination thc and hl be ecoveed isthe roehly bil ase part fui (6) The amount ofthe impact of chang in ew tobe adj and recovered sal be ealealed — (@ where he agrament as down any fam, nacre with uc onlAckfrot@MAAIABOC- Electricity (Timely Recovery of Costs due to Change in Law) Rules, 202t-pdf ro Se oO ETT (b) where the agreement does ot ay down any oral in secordce with be fomla give inthe Setedule tate rss, (6 The reovery ofthe impacted amour, incase ofthe fed amount al be — (incase of eerion poet, within a perio of oe-hndredcighy moths or (in eas ofrecuring input, nil impute. (7 The geertng company or enmison ese shal, witin thy dys of he coming it tet of the recovery of inact of eng ina, famish ll leant documents along with te deals ofcaleulation tothe “Aponte Commision fr atment ofthe amowt ofthe pat in tae monly ei rela (8) The Appropriate Commision shal verify he alelton and asthe sunt of theipact in th manly wir charges wat iy days om te dato oxi of he relevant docuneats nde sb-e (0) After the adjsaens of be amous of te impat in the monly io charges der sabe (8), he geseting company or ronsmisin lees a the abe maybe, all ast the monty nif or cares enually based on seta moun recovered ens ta the payment the aed pry isnot more an heya acy mov ‘THESCHEDULE (Seed 50) [FORMULA FOR DETERMINATION OF IMPACT IN TARIFF OR CHARGES DUE TO CHANGE IN LAW Formula eeulate adjust inthe awly ef due othe input of Change in Law, wich sno securing in For Generation Pjet— Le financial impact of ebngein aw =P the th madison nthe monty sf (MT) foe conpensating the Haan inpct sven y wr = where X= einated monthly lactic geneation (kWh) = 1/12) x eons capacity ofthe powerplants per the Agrsment (MW) Nomatve Plat Load Factor (PLE) or Avast itr or Capsity Usain Factor (CU) (ease oF RE, as per theApeement (9) * 876D ous» 10 (fin case PLF and CUP is ot provide, the aby factor mentioned inthe agremest maybe considered omere, it lb rd up with ference othe aa enero om saa ais) ‘n= No. of months over which he nae inpt bao be psi (bet ¢ maximum of 180 mons in ease of be ooreuing fixed mont bt in caso curing impact wl eile inpct persis) and whee R= sana rte of intrest on loan componsst (i 6) a cmsidered by the Cental Soticty Regultury Commision in ts Oder fr Taff determination from Corveton or Renewsble Energy Sources (whichever s applicable forthe yearn which he jet commissioned In absence of eleva Orders of he Cea lity Regusiory Commieson for th concerned yar, he inet ale sl be average interes ate pls 200 ass pois above the average Sate Bunk ofl Maria Cost of Funds based leading ras of ne year oa, prevalent uring the naval six mont for sch pero. Fart, generating company oc intrmediry poser a the wading Noose sal us up the LA anally based on seta generation ofthe year oa to ens atthe payment tothe feted partys caped athe yeni enmity sun (F.No.29180020-RAR] (GHANSHYAM PRASAD, R. Sexy.State-wise Pucl & Power Purchase Cost Adjustment for FY 2020-21 ‘Whether Fuel Surcharge ‘Adjustment Frequency oF adjustment of Fuel Feet Surctarge Adjustment ‘being done sper the —— pond esienen regulations? If not, please camer provide the reasons hero Yearly. But he sme a as ren mend 0 peee Ye ual mectisn Ye ‘wel fn 01042021 Ara Pradesh No Chis Yer Ei Ya Deb Yer ‘Guar Ye Tre Fae Sora Ajsimen fmol vax | mechani sot provid fn = . Cui tezlason However the Crary 7 FPPPA mechanism inaleady in lace in Gujarat Tagan Yes rae Yer os Ye Ours Ye. Aadonan & Quanedy | Re Nopphcaie es Nicobar ln a Diese Geneon Paicher Yen re de Chandigah Yer ur thn Lakshadweep Yes Quaneriy Ee teeta eran Yes Quarry one Daman & Di Ye ah Tae Yes Tag up oT aap aK & Ladakh | sakecaeofsichvarintons as | Notappliable Nope sncontolibe factors a Tats provided n Tat sniper a To'be made mony Ye ToT provided Tah Mier ae To-be made mony Yes No, aay Soe Yes uanety aver = wn TN Gui Subnision Sack ie Quay ‘wasnt made ‘ Oumeiy | Nae Sin ve ra Tear Subona not made Ye Korte ‘Ys, Tecomnision fas rosie the regulations for wallestion of FAC on 2203.013. Te FAC is -fleetve fom 01,07.2013 Quire Fel surclarge Adjustment eng done a prthe Regulations Kerala Yes Quarry ate sub aioe The fase off surcharge ia he ase of cetala unapproved PPA have bon iat in the Hone APTEL andthe 'APTEL deston has boon stayed by the Hore Supreme Cour. Mater is ponding inthe APEX cour at resent Mahacestirs ‘Yes, Fuel sucharge Adjasent Formulas provided in MYT Tail Regulatons,2018, Monty “Yes Fuel suc Adjustment Formula being dane as per MYT Tart Regulatios 2019Futhe, FAC sbilztion fund have bee rete to have minal ‘impoet of monthly FAC aritons on end consumers Yes, Ful surcharge ‘Adjusment Formulas povided in MYT Tait Regulations 2019, Monthy "Yes, Fel surcharge ‘Adjysuest Formule being hone spe MYT Taal Repuations 2019 Fhe, FAC stabilization find neve ben ested to have mii impact of monthly FAC variations on ‘hd sone Yes, Fuel surcharge Asien Formula i provided in MYT Tani Regulations 2019 Monthly Yes Fel surcharie Adjustment Frm being one jer MYT Tait Regulations 2019, Further, FAC sabiizion find have ben crested to ave mia impact of monthly FAC variations on fe sonsumers ‘Yes, Fue! surcharge Adjustment Formulas provided in MYT Tait Regulations 2019 Monthy "Yes Ful surcharge Agjustnert Formula being done as jer MYT Tash Regulasons 2019, Furher, FAC sablizaion fund have been erated 0 ave mitimal inpt of‘monthly FAC variations on cideonsmen Appt Mephalya Ye Comision or Ye TORT oRIRIORT STE famed forthe Sate of Nagsind | Nagaland ice here isn0 NA NA Cot based Thermal lat a the Ste Oia Yes Dae = Pana Yes Dust a aes Yer eh 3 Test Eleefcty | Yes Provided in MYTiaitt | Quart Assened | Pein ot fed bythe emery Reaualons TO2062013) | Lies TANGEDCO Commision ves ettiwe | Mechanised in lececiy | TERC Fuel and Power uarety x Commer) | purchase rice Adjustment For) Regulations 201 Yes as per Relations the cence hat ifr el Surcharge austen ( However inte MYT cuanerty | -Ye.as prt Reglatns sequins 3019 the same is "ele to" increta Coa Yaraspar Repl te eens has le fr el ‘orcargeagusmers However inthe MYT uarerty | Yes aperteReplaions reglation 2019 the snes ‘ofr 8" eri cont) ‘Unar Pradesh Yea per Regulations the Usenet lef fl ‘arhargeejomens However, inthe MYT ouanery | Yes ae prt Regulations regulations 3019 thesaneis Temes se "neemertl Cos Yaraape Rog e cena hao le el surlage waren However. inthe MYT unerty | Yeas pero Repulaons regulations 2019 the sume is refered a" increrentl Cos’‘Yess per Regulations the Licensee hs to fle ffl ‘surcharge ajustents Hower, nthe MYT Cquaney | Yes perthe Regulations septs 519 the sae i ‘lee aterm Cos Yaa pr Rega he Licence as efor fol ‘erage ausmens However inthe MYT county — | Yen as perth Regains segulaton 2019 tess iene ar" nto Goa) Yas Fal Se Acjesmert is bg does perthe Relations nti {5 teeommisson araand Ye ety [ter rene of RT surcharge beng bed regulary bythe commission based oni sbmison of he license Inthe mater